Skip to main content

Commonly asked questions about 401(k) rollovers

General


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. 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 2–4 weeks to complete. Please contact your plan's provider to better understand time frames.

When I'm having my money rolled over to Vanguard, whom should I have the check made out to?

Vanguard FBO [your name as it appears here at Vanguard]

Where should I have the check mailed?

By U.S. mail:

Vanguard
P.O. Box 982901
El Paso, TX 79998-2901

By registered, certified, or overnight mail:

Vanguard
5951 Luckett Court, Suite A1
El Paso, TX 79932-1882

Note: If the check is made payable to Vanguard, do not endorse it. If the check is made payable to you instead of Vanguard, you should endorse it, and mail it to us within 60 days. To avoid owing taxes or penalties on early withdrawals, check with your tax advisor.

Consider mobile check deposit
If you're already a Vanguard client and you're registered for online access, remember that you can always use our mobile check deposit option offered through the Vanguard app. It's faster than mailing a check!

When you’re logged on and using the app, just tap the Mobile check option under the main menu and then follow the instructions. Learn more about mobile check deposit

Can my money be wired directly into my Vanguard IRA?

It depends. Some providers allow for wire transfers, while others don't. Please reach out to your current provider. If allowed, search "wire instructions" on our website to get your account specific wire instructions. Or call us at 877-662-7447 for additional help.

Do I have to select specific investments for my IRA right away?

No. The check will automatically be deposited into the money market settlement fund in your IRA. Once the money is available in your account, you can then select how to invest your assets.

Back to top

Minimums, costs, and fees


How much money do I need to open a Vanguard IRA?

At Vanguard, you can open an account with a $0 balance. But there are a few minimums to keep in mind as you begin to invest.

  • Vanguard ETFs: You only need enough money to cover the price of 1 share, which can generally range from $50 to a few hundred dollars.
  • Vanguard mutual funds: Some Vanguard mutual funds have a $1,000 minimum (like our Target Retirement Funds). Most of our other Vanguard mutual funds have a $3,000 minimum.

How much does it cost to roll over my savings into a Vanguard IRA?

Vanguard doesn't charge any processing fees for rollovers. However, the custodian of your plan may charge a fee for the rollover. Vanguard does not reimburse for other firms' fees. To see if you will incur a fee, please contact your plan provider.

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 clients with at least $50,000 in qualifying Vanguard assets.)

Back to top

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), 403(b), or 457 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 ($6,000 for the 2019 tax year and $6,000 for the 2020 tax year. If you're age 50 or older, $7,000 for the 2019 tax year and $7,000 for the 2020 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?

This depends on your plan. First, you'll want to reach out to your provider to determine if moving the assets over "in-kind" or "as is" could be an option for you.

If it is an option, then you'll want to contact us at 877-622-7447 (make sure you have an updated account statement on hand). One of our rollover specialists can help determine if we can hold your current investments here at Vanguard.

If it isn't an option, don't worry—we can still help you choose new investments once your assets have arrived here at Vanguard.

Back to top

Withdrawals


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.

Back to top
Start your rollover online

We're here to help

Personal Investors

Employer-plan participants

REFERENCE CONTENT

Layer opened.

Ordinary income

Any income that's not considered capital gains.