How to Roll Over an Old 401(k): Direct Rollover vs. Roth Conversion (2026)
When you leave a job, you may have several choices for your old 401(k) account. Depending on the rules of the plan, you may be able to leave the money in the old plan, move it to a new employer plan, roll it into an IRA, or take a distribution. A direct rollover can help you move retirement money without having the funds paid directly to you first. However, the tax result depends on the type of account you have and the destination you choose. Important Difference A direct rollover from a Traditional 401(k) to a Traditional IRA is generally not taxable at the time of transfer. Moving Traditional 401(k) money to a Roth IRA is a Roth conversion and generally creates taxable income for that year. 1. Review Your Options Before Moving an Old 401(k) Before requesting a rollover, review the choices available to you. The best option can depend on plan fees, investment choices, creditor protections, employer matching rules, taxes, and whether you expect to make Roth ...