Transfer: the default method

A trustee-to-trustee transfer moves assets directly from one IRA to another IRA of the same type. The funds never touch your hands. There is no limit on how many transfers you can make in a year, no 60-day clock, and no reporting on your tax return. Traditional to Traditional, Roth to Roth, and SEP to Traditional all transfer cleanly.

Transfers are initiated with the receiving administrator, which sends the request to the delivering institution along with a recent statement. Timing depends almost entirely on the sending firm, and one to three weeks is typical.

Rollover: for employer plan money

A rollover moves funds out of an employer-sponsored plan: a 401(k), 403(b), governmental457(b), TSP, or a plan from a former employer. The distinction that matters isdirect versus indirect.

A direct rollover sends the funds straight from the plan to the IRA. Nothing iswithheld, nothing is reported as taxable, and no clock starts.

An indirect rollover distributes funds to you first, and you have 60 days to redepositthe full amount into the IRA. Employer plans are required to withhold 20% forfederal income tax on the distribution, but the IRS expects the full originalamount redeposited. That means you must replace the withheld 20% out of pocket,or that portion is treated as a taxable distribution, plus a 10% earlywithdrawal penalty if you are under 59½. You recover the withholding only whenyou file.

There is also a one-rollover-per-12-months limit that applies to indirect IRA-to-IRArollovers, aggregated across all IRAs you own. It does not apply to directtrustee-to-trustee transfers or to rollovers from employer plans.

The practical takeaway: use a direct transfer or direct rollover unless there is a specific reason not to.

Contribution:new money

An annual contribution is new money from earned income. For 2026, the limit is $7,500, or$8,600 if you are age 50 or older, combined across all Traditional and RothIRAs. The deadline for a given tax year is generally the April filing deadlineof the following year, without extensions.

If you contribute between January 1 and April 15 and intend it for the prior tax year, you must designate that explicitly on the contribution form. Otherwise it will be recorded as a current-year contribution.

Combining methods

Nothing prevents you from using all three. A common pattern is a transfer from an existing IRA to establish the balance, a rollover from a former employer's 401(k), and an annual contribution each year thereafter.

Which sequence and which accounts to move are personal decisions with tax consequences. Talk through your specific situation with your own financial advisor or CPA before initiating a rollover.

Frequently Asked Questions

What is the difference between an IRA transfer and a rollover?

A transfer moves funds directly between two IRAs of the same type. It is unlimited, not reported on your tax return, and has no time limit. A rollover moves funds from an employer plan, or between IRAs with the funds passing through you. Rollovers carry a 60-day deadline and, for indirect IRA-to-IRA rollovers, a one-per-12-months limit.

Can I roll a 401(k) into a self-directed IRA?

Generally yes, if the funds are eligible for distribution. That is typically after leaving the employer, or through an in-service distribution if your plan permits one. Request a direct rollover so the plan sends funds straight to the IRA. This avoids the mandatory 20% withholding that applies when the check is made out to you.

What is the 60-day rollover rule?

If a distribution is paid to you rather than sent directly to the receiving account, you have 60 calendar days to deposit the full amount into an eligible retirement account. Miss the deadline and the amount is treated as a taxable distribution, with a 10% early withdrawal penalty if you are under 59½.

How many IRA rollovers can I do per year?

One indirect IRA-to-IRA rollover per 12-month period, counted across all your IRAs combined. Direct trustee-to-trustee transfers are unlimited and are not subject to this rule, which is one of the main reasons transfers are preferred.

How long does it take to fund a self-directed IRA?

A transfer from an outside institution commonly takes one to three weeks, driven mostly by the sending firm's processing speed. Direct rollovers from employer plans vary by recordkeeper. Contributions by check or wire post fastest. Begin funding well before you need the money for a purchase.

Can I transfer only part of my existing IRA?

Yes. Partial transfers are permitted. Many investors move only the portion they intend to allocate to alternative assets and leave the remainder where it is.

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