I've run into an issue in my personal finance journey that many people now struggle with: having a collection of 401k and 403b accounts left over from previous employers, some of which have been sitting untouched for years. I'm making it a goal to finally consolidate these accounts and roll them over into a new, low-cost IRA through Vanguard. However, I recently read that for 2015 the IRS has imposed new limitations on the number of accounts that can be rolled over per year.

I've been looking over the IRS documents relevant to this new rule, but I'm not sure I understand them correctly, particularly the distinction between a "rollover" and a "trustee-to-trustee transfer."

IRS.gov: IRA One-Rollover-Per-Year-Rule

IRS.gov: Rollovers of Retirement Plan and IRA Distributions

I think I may be confused on terminology here, but am I reading correctly that if I can get my individual 401k and 403b brokers to transfer funds directly to Vanguard, this does not technically count as a "rollover?" I would prefer this situation anyway rather than having a check made out to me that I then have to deposit within 60 days to avoid taxation... Is that the scenario the IRS is hoping to avoid with this rule?

The last thing I want is to get slammed by the IRS for making an ill-informed mistake... That said, I have about 5 accounts from previous employers that I've neglected to rollover in a timely manner. The idea of rolling over one per year for the next 5 years is something I'd like to avoid if possible. Thanks for any help you can provide.

1 Answer 1


From your first link: IRS.gov: IRA One-Rollover-Per-Year-Rule

IRA One-Rollover-Per-Year Rule

Beginning in 2015, you can make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless of the number of IRAs you own (Announcement 2014-15 and Announcement 2014-32). The limit will apply by aggregating all of an individual’s IRAs, including SEP and SIMPLE IRAs as well as traditional and Roth IRAs, effectively treating them as one IRA for purposes of the limit.

They are limiting your ability to roll over money from an IRA to an IRA. You are looking to go from a 401K to an IRA. That is fine.

The idea was that some people were taking all money from their IRA, using it for almost 60 days, then putting it back into an IRA. Thus getting a sort of short term loan. They could do this multiple times in a year.

The direct trustee-to-trustee transfer are exempt from the once per year rule because the money is never in your possession.

Moving money from a 401K/403b/TSP plan from your former employer to an IRA or Roth IRA is fine, and isn't limited to once per year.

  • 1
    I understand. I think my confusion was in the terminology of "rollover" which I have heard applied broadly to any sort of retirement transfer. So, I am actually looking to do a trustee-to-trustee transfer in all cases. Thanks for your help!
    – akbarratt
    Jul 29, 2015 at 16:50
  • The last sentence in the quoted text seems to say that consolidating multiple retirements into one counts as a single rollover. Jul 30, 2015 at 18:16

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