How many 401k rollovers per year: rules and strategy

How many 401k rollovers per year you can do depends on the type of rollover. The rules look simple, but the details decide your taxes, timing, and risk.

How Many 401k Rollovers Per Year?

The “one rollover per year” rule confuses many savers. It applies only to 60-day IRA-to-IRA rollovers. It does not apply to 401k rollovers. Let’s take a closer look:

401k → IRA rollovers

• What it is: Moving money from your workplace 401k into an IRA you own.
• Types:
  • Traditional 401k → Traditional IRA → No taxes owed, money stays pre-tax.
  • Traditional 401k → Roth IRA → This is a Roth conversion. You’ll owe taxes on the rollover amount, but all future growth and withdrawals (after age 59½) are tax-free.
• Limits: Unlimited if done as a direct rollover (trustee-to-trustee).

401k → 401k rollovers

• What it is: Moving money from an old employer’s 401k into a new employer’s 401k plan.
• Why do it: Keeps all retirement savings in one account; may give you access to institutional-class funds or loan options.
• Limits: Also unlimited, if the new plan accepts rollovers.
• Tax note: Not a Roth conversion unless you specifically roll into a Roth 401k and pay taxes on the pre-tax balance.

IRA → IRA rollovers

• What it is: Moving money from one IRA to another.
• Two ways to do it:
  • 60-day rollover → Money is sent to you, and you must redeposit it within 60 days. This is where the one-per-year rule applies (across all your IRAs).
  • Trustee-to-trustee transfer → Money goes directly between institutions. Unlimited, no 60-day clock.
• Roth conversion? Yes, if you move money from a Traditional IRA into a Roth IRA, that counts as a Roth conversion (and taxes are due).

Understanding the differences between conversions and rollovers

A rollover moves money between retirement accounts of the same tax type, like a Traditional 401(k) into a Traditional IRA, with no taxes owed. A conversion moves pre-tax money into a Roth account, such as a Traditional IRA into a Roth IRA, which triggers taxes now but sets you up for tax-free withdrawals later. In short: rollovers keep the tax status the same, while conversions change it.

The Core Question: How Many 401k Rollovers Per Year?

That means you can complete multiple 401k-to-IRA direct rollovers in the same year. You can also do multiple plan-to-plan rollovers, if your plan allows it. Keep in mind: your plan’s distribution rules still control when you can take money out.

This distinction matters. A 60-day IRA rollover sends money to you. You then redeposit it within 60 days to avoid taxes. You can do that only once in any 12-month period across all your IRAs. Trustee-to-trustee transfers between IRAs are unlimited. Direct rollovers from a 401k to an IRA are also unlimited.

If you leave a job in March and again in August, you may roll each 401k into one IRA. You can do both as direct rollovers during the same year. You avoid the one-per-year IRA rollover limitation. You also avoid withholding and late redeposit risks.

How many direct rollovers per year can you do?

Direct rollovers move money straight from one custodian to another. The check is payable to the new institution for your benefit. There is no 60-day clock. There is no IRS limit on how many direct rollovers per year you can do. Plan documents can still set timing rules. Your employer’s plan may allow rollovers only at separation or at age-based windows.

You still need a plan. Consolidation should align with asset allocation and fees. You can learn the process step-by-step in how to roll over your 401k when you retire or leave a job. That guide explains paperwork, account setup, and custodial details. It helps you avoid missteps.

Plan rules vs IRS rules: frequency and eligibility

Plan rules decide whether you can take a distribution at all. IRS rules decide how taxes work after the plan releases funds. Because of that split, people mix up limits. If you ask how many 401k rollovers per year are allowed, remember the plan governs access. Your plan might allow one in-service withdrawal per year. However, IRS rules will not cap your direct rollovers. They will cap only 60-day IRA rollovers. Therefore, read both sets of rules before you act.

Suppose your current plan allows a once-per-year in-service rollover at age 59½. You could shift a slice to an IRA yearly. You could repeat that as a direct rollover and never hit the IRA one-per-year rule. If you change jobs twice in a year, you could roll both plans as direct moves.

You also avoid overlapping clocks. Each plan distribution follows its own plan schedule. Direct rollovers keep taxes deferred. You keep your long-term plan intact.

Avoid pitfalls with indirect rollovers and withholding

Indirect rollovers put money in your hands. Plans must withhold 20% for taxes. You then have 60 days to redeposit the full amount. You must add cash from savings to replace the 20% withheld. Otherwise, the withheld part becomes taxable and may face penalties. That is a steep and needless risk for most people.

Because of these rules, choose direct rollovers whenever possible. You avoid the 60-day deadline. You also avoid the one-per-year IRA rollover cap. The IRS explains these mechanics in its rollovers of retirement plan and IRA distributions guide. Review it before you start paperwork.

Strategy examples using the Savings Playbook

The Boldin Savings Playbook sets a smart order. First, capture the employer match. Next, build an emergency fund. Then, fill tax-advantaged accounts. After that, use other investments. Rollovers should support that sequence. They should not interrupt it.

Consider a mid-career worker with two old 401k plans. Fees run high in both plans. The worker wants index funds and a Roth conversion plan. They can process two direct rollovers this year. They move both accounts into one low-cost IRA. They then shift the freed-up cash flow to max new contributions at work. The sequence follows the Playbook and reduces drag.

Another case involves a contractor who leaves projects twice in one year. Each plan lets them roll money at separation. They complete two direct rollovers to a single IRA. They keep investments aligned and costs transparent. They stay on track for their emergency fund and HSA targets.

Company stock and NUA: special case

Employer stock in a 401k can unlock tax breaks. Net unrealized appreciation lets you move company shares to a taxable account. You pay ordinary income tax only on the plan’s cost basis. Future gains can then qualify for capital gains rates. The process requires a lump-sum distribution that follows strict rules.

Because the rules are technical, slow down and plan. Start with our NUA explainer on company stock rollovers. That guide outlines the steps, timing, and typical pitfalls. It also shows when NUA does not fit. Use it to pressure-test your case before you request a distribution.

Rollover timing, taxes, and portfolio changes

Timing matters because markets move and taxes stack up. You may want to consolidate before rebalancing. You may also want to harvest losses in a taxable account first. You can stage multiple direct rollovers per year to manage risk. For example, you could move half now and half next quarter. You keep exposure steady while you switch custodians.

Taxes also vary by path. A direct rollover to a traditional IRA keeps taxes deferred. A rollover to a Roth IRA counts as a conversion and adds taxable income. You can explore both paths in our guide to when and how to roll over a 401k into an IRA. That piece explains tax forms, custodian language, and common timing questions.

Coordinating rollovers with withdrawals and drawdown

Your drawdown plan sets the destination. Therefore, align rollovers with how you will spend later. You may centralize accounts to simplify required minimum distributions. You may also match asset locations to tax features. Bonds can sit in tax-deferred accounts. Stocks can capture tax loss harvesting in taxable accounts.

You can map that path in our retirement withdrawals guide. It explains tax brackets, sequencing, and Social Security timing. You can then coordinate that roadmap with your rollover schedule. You avoid short-term mistakes that create long-term tax drag.

How to execute a clean rollover

Start with the destination account. Open the IRA or new plan first. Select funds that mirror your target asset mix. Then call the current plan and request a direct rollover. Ask for a check payable to the receiving custodian for your benefit. Confirm mailing addresses and tracking. Keep notes for your records.

Next, confirm the deposit and invest according to your policy. Rebalance if needed. Update beneficiaries. Review fees in both the old plan and the new account. Consider the protections you give up when leaving a plan. Plans often provide ERISA creditor protection. IRAs have protection that varies by state. Therefore, review your risk profile before you move.

Finally, document the move in your plan. Write down why you rolled funds this year. Tie the action to your Savings Playbook sequence. Note how the rollover supports fees, taxes, and simplicity. That habit improves discipline and results.

Checklist to decide if a rollover makes sense this year

Start with goals. Do you need better investment choices or lower fees. Do you seek Roth conversion flexibility. Then check access. Does your plan allow in-service rollovers or only post-separation moves. Verify that rule first. If you must wait, set a reminder for your eligibility date.

Then map taxes and timing. Will a rollover change your 2025 taxable income. Will it affect health insurance subsidies. Could you split moves across quarters to manage brackets. Finally, plan execution. Write down how many 401k rollovers per year you plan and why. Choose direct rollovers to avoid the 60-day risk. Confirm there is no limit on how many direct rollovers per year. Keep your Savings Playbook priorities intact.

Roth conversions and the once-per-year misunderstanding

People often ask how many 401k rollovers per year they can do when planning Roth conversions. The answer depends on method. Direct rollovers from a plan to a Roth IRA count as conversions. You can do several in one calendar year. You still manage taxes with brackets and credits. You also track the five-year clock for converted funds.

Plan the tax load with care. You might split conversions across quarters. You might pair conversions with charitable giving. You might also harvest losses in taxable accounts. The Boldin Retirement Planner helps you model income, brackets, and surtaxes. You can compare scenarios before you execute a rollover.

When keeping money in a 401k may be better

Sometimes the best move is to wait. Plans can offer lower institutional fees. They may also offer stable value funds. They often provide strong creditor protections under ERISA. Your state may protect IRAs differently. Because of that, review your risks before you consolidate.

If you still work past 73 and are not a 5% owner, your plan may delay RMDs. IRAs cannot do that. You could keep money in the plan for one more year. Then roll it later as a direct rollover. You maintain control and avoid unneeded taxes. You also keep the answer to how many 401k rollovers per year flexible.

Multiple plans in one year: a coordination play

Many workers change jobs more than once in a year. They can have two or three small plans to consolidate. They can process each as a direct rollover without IRS limits. They still need to decide the destination. They should also choose a target fund mix and rebalancing plan.

Use a simple approach. First, define your policy mix. Next, line up receiving accounts and custodians. Then schedule each move. You might move one plan per month. You reduce errors and keep market exposure stable. You can also revisit the plan as each deposit clears.

Fees, investments, and advice access

Rollovers do more than change account labels. They change fees and fund menus. They can also change advice options. Some custodians include planning tools. Others offer robo portfolios. Your plan may include advice services at low cost. Because of these differences, compare total cost and service levels first.

If you want guidance, start with education. Read how to roll over your 401k when you retire or leave a job. Then review when and how to roll a 401k into an IRA. Finally, plug numbers into the Retirement Planner. You will see how account choices change outcomes.

Documentation, errors, and audit trails

Good records protect you. Keep plan statements, distribution forms, and custodian confirmations. Save envelope tracking numbers. Take notes during calls. If a check goes missing, you can prove dates and instructions. If tax forms show errors, you can ask for corrections quickly.

You also need to label conversions and rollovers correctly. Your custodian should code the 1099-R and 5498 forms. Still, verify them. If a code is wrong, ask for a fix. Mistakes can confuse the IRS. Clean records prevent long letters later.

FAQs: How many 401k rollovers per year