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Consider a traditional 401K getting rolled over to a rollover IRA. When such a rollover happens, do the stocks and mutual funds get sold and the total sum gets transferred as cash into the new account OR do the stock/mutual fund units get preserved? Also, does a similar thing happen if a rollover-IRA or a traditional IRA gets rolled over to a Roth IRA?

So say I had a rollover IRA where I have 10 stocks of Tesla of say $1000 each. If I roll this over to a roth IRA account, will my 10 stock units be preserved or will I get $10,000 in cash in my roth IRA account?

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Either is possible. Usually on the rollover paperwork, there is an option for whether you want to do an in-kind transfer or liquidate your current holdings and transfer the proceeds.

In general, assuming you do a direct trustee-to-trustee transfer and the accounts on both sides have access to the same security, your shares would just get transferred over (assuming that's the option you choose). But that isn't always possible. For example, many 401(k) plans have special funds for employer stock that aren't available outside the plan. Those funds would need to be liquidated rather than transferred in kind if you rolled them over. Or you could (though why would you) roll over a 401(k) that let you buy individual stocks to an account at a mutual fund company that didn't have the ability to hold individual stocks.

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