Retirement Rollovers, Conversions & Recharacterizations

Retirement funds have become much more fluid over the years as individuals have become more accustomed to working for multiple employers each setting up and administering separate 401(k) and/or IRA accounts. There can be a number of reasons an individual will need or desire to perform a rollover, conversion or recharacterization.

  • A change of employment could prompt the employee to shift retirement funds from an old 401(k) into something more liquid
  • One may wish to convert or rollover based on the fee structure and cost of maintaining a current account
  • Some may want to consolidate multiple accounts to enhance simplicity in managing their own retirement funds
  • The number one reasons to rollover into a different account is to increase your personal control over the funds housed there (like setting up a self-directed IRA

Whatever the reason for rolling over, converting or recharacterizing a retirement account, the process is generally not too painful. When doing so, it is helpful to know the explicit IRS rules to ensure any conversion or rollover is deemed a permissible transaction.