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What is a rollover and how do I initiate one?

An IRA rollover moves funds or assets from one qualified retirement account to another, such as from a 401(k), 403(b), 457, or Thrift Savings Plan into an IRA. Rollovers may also occur between IRA accounts.

Rollovers are commonly used when changing jobs, retiring, or consolidating retirement accounts. Depending on the type of rollover, IRS rules and tax reporting requirements may apply.

Direct vs. indirect rollovers

A direct rollover occurs when your retirement plan administrator sends funds directly to your IRA custodian. Because the funds are never distributed to you personally, direct rollovers generally avoid:

  • Mandatory 20% federal tax withholding
  • The IRS 60-day rollover requirement
  • Potential taxes and penalties associated with missed deadlines

An indirect rollover occurs when funds are distributed directly to you before being redeposited into another retirement account.

With an indirect rollover:

  • Funds must be redeposited into the IRA within 60 days - Submit STRATA's Deposit Certification form to submit rollover funds to STRATA
  • Your plan administrator is generally required to withhold 20% for federal taxes
  • You must replace the withheld amount out of pocket to avoid taxes on the withheld portion
  • Taxes and penalties may apply if rollover requirements are not met

The IRS also limits IRA-to-IRA indirect rollovers to one rollover per 12-month period.

How to initiate a direct rollover

If you are retiring, changing jobs, or separating from employment, you may request a direct rollover from your employer-sponsored retirement plan into your STRATA IRA.

  • Step 1: Contact your current plan provider - Request the distribution paperwork and elect a direct rollover to STRATA.

  • Step 2: Open your STRATA account - If you do not already have a STRATA account, you will need to open your IRA.

  • Step 3: Direct your investments - Once your rollover funds have been received, you are ready to onboard and direct investments within your STRATA IRA.

How long does a rollover take?

Direct rollovers from employer-sponsored retirement plans generally take 2–6 weeks, depending on your current plan administrator’s processing procedures.

IRA-to-IRA rollovers may be completed more quickly than direct transfers; however, they are reportable transactions. The distributing custodian will report the distribution on IRS Form 1099-R.

Distributions may be issued as:

  • Cash distributions (following liquidation), or
  • In-kind distributions (re-registration of existing assets)

You then have up to 60 days to redeposit or re-register the same assets into your IRA to avoid taxes and potential penalties. 

STRATA typically initiates transfer or rollover requests within two business days of receiving completed instructions. Timing may vary depending on:

  • The current custodian or plan administrator
  • Whether the request involves cash or in-kind assets
  • Additional onboarding or investment documentation requirements

Cash-only requests are generally processed more quickly than in-kind asset rollovers.

Important considerations

  • The IRS limits IRA-to-IRA indirect rollovers to one 60-day rollover within a 12-month period
  • The “same property rule” applies, meaning the same cash or assets distributed must be rolled back into the IRA
  • Rollovers may be completed in cash or, if eligible, as an in-kind transfer of existing assets
  • Additional onboarding documentation is required for in-kind asset rollovers
  • Publicly traded securities require a brokerage account that permits a third-party custodian arrangement
  • Failure to meet IRS rollover requirements may result in taxes or penalties

Always consult a qualified tax professional regarding your specific situation. Refer to the IRA Portability Chart for rollover eligibility. Review Fund My Account for more information.