Commonly asked questions about 401(k) rollovers
Minimums, costs, and fees
Rollovers and asset transfers
What's a rollover?
A rollover is when you move the assets in an employer-sponsored retirement plan, such as a 401(k) or 403(b), into an IRA.
How do I roll over my retirement plan savings into a Vanguard IRA®?
You start by deciding what type of IRA is best for you and choosing your investments. You'll then call the financial company that holds your former employer's retirement plan and have your savings moved into a Vanguard IRA.
How long does a rollover take?
Rollovers typically take 2 to 3 weeks to complete.
When I'm having my money rolled over to Vanguard, whom should I have the check made out to?
You should have the check made out to Vanguard Fiduciary Trust Company, FBO [your name].
Where should I have the check mailed?
You can have the check mailed to you or directly to us at the following address:
P.O. Box 1110
Valley Forge, PA 19482-1110
Note: If the check is made payable to you instead of Vanguard, mail it to Vanguard within 60 days to avoid paying potential taxes and penalties on your savings. Please don't endorse the check.
Can my money be wired directly into my Vanguard IRA?
It depends. Some providers allow for wire transfers, while others don't. Call us at 800-523-9442 and one of our rollover specialists can help you determine the best way to have your money transferred.
Do I have to select specific investments for my IRA right away?
No. If you're not ready to decide how to invest your savings, we'll help you decide where to put your money temporarily until you're ready to decide on your long-term goals.
Minimums, costs, and fees
How much money do I need to open a Vanguard IRA?
You can invest in any Vanguard Target Retirement Fund with as little as $1,000. You'll need $3,000 to buy most other Vanguard mutual funds, though there are some with lower or higher minimums.*
And you can invest in any ETF (exchange-traded fund) for the price of 1 share, which will vary throughout the day.
Other companies' funds may have different minimums, so be sure to check their prospectuses. And like ETFs, minimums for individual stocks, CDs (certificates of deposit), and bonds are based on their current market prices.
How much does it cost to roll over my savings into a Vanguard IRA?
Vanguard doesn't charge any processing fees for rollovers. But depending on the investments you choose, there may be certain transaction or brokerage costs, which we keep as low as possible. Call us at 800-523-9442 to find out what costs may apply to your specific situation.
Do you charge account service fees?
Yes. But you can have the $20 annual account service fee waived if you register for online access and opt for e-delivery of account documents. (The fee is automatically waived for Vanguard Voyager, Voyager Select, Flagship, and Flagship Select Services clients.)
Rollovers and asset transfers
What's the difference between a rollover and an asset transfer?
The main difference between a rollover and an asset transfer is where the money is held before it's moved to Vanguard. If you're moving money to Vanguard from:
- An employer-sponsored plan, such as a 401(k) or 403(b), you can initiate a rollover—typically, when you change jobs or retire. When you roll over retirement plan assets, you're moving them from a group plan into an IRA (which generally offers greater investment flexibility).
- An IRA at another financial institution, you can initiate an asset transfer, tax-free. You can also transfer securities held in a brokerage IRA at another financial institution into a Vanguard Brokerage IRA.
Can I roll over my employer-sponsored retirement plan assets into a Vanguard IRA?
Yes. You can roll over almost any type of employer-sponsored retirement plan, such as a 401(k) or 403(b), into a Vanguard IRA.
Can I transfer any additional IRA savings I may have outside of my employer-sponsored retirement plan into a Vanguard IRA?
Yes. You can move any IRA money you have saved outside of your employer-sponsored plan into a Vanguard IRA through an asset transfer.
Can I roll over my retirement plan assets into a Roth IRA?
If you have a Roth 401(k) or 403(b), you can roll over your money into a Roth IRA, tax-free.
If you have a traditional 401(k) or 403(b), you can roll over your money into a Roth IRA. However, this would be considered a "Roth conversion," so you'd have to report the money as income at tax time and pay ordinary income tax on it.
Once I roll over my retirement plan assets into a Vanguard IRA, can I make additional contributions to my account?
Yes, you can make contributions to your IRA, subject to the IRS annual contribution limits ($5,500 for the 2018 tax year and $6,000 for the 2019 tax year. If you're age 50 or older, $6,500 for the 2018 tax year and $7,000 for the 2019 tax year).
Just remember that once you add money to your rollover IRA, you may not be able to roll the account into a future employer's plan.
Can I keep the same funds I have in my retirement plan?
Yes. Call us at 800-523-9442 and one of our rollover specialists can help you reinvest in the funds you already have.
Can I take money out of my IRA before I reach retirement?
Yes. And you don't have to pay it back like you would with a loan from your employer-sponsored plan.
However, withdrawals you make before age 59½ may have consequences:
- Roth IRA: There's a 10% federal penalty tax on withdrawals of earnings before age 59½. Withdrawals of your contributions are always penalty-free.
- Traditional IRA: There's a 10% federal penalty tax on withdrawals of contributions and earnings before age 59½.
There are some exceptions** to the 10% penalty, so be sure to check the IRS website for details.
Any income that's not considered capital gains.