How to Roll Over an IRA to a 401(k)

Rolling over your 401(k) to an individual retirement account is common practice when starting a new job, but what about doing the opposite: moving IRA assets into a 401(k) plan? While not nearly as common, these reverse rollovers do exist and may be an option if you’re an investor looking to merge multiple retirement accounts.

When considering a rollover of any variety, it may help to work with a financial advisor who can guide you on your path to retirement.

Reasons to Roll Your IRA Into Your 401(k)

A reverse rollover occurs when you transfer retirement assets from an IRA that you manage to your current employer’s 401(k) plan.

Moving money out of an IRA and into a 401(k) does offer a number of potential benefits.

Convenience Over Control

Perhaps, you opened an IRA with the intention of creating and actively managing a diverse portfolio. However, you’re now finding that you don’t have the time or energy to devote to your portfolio, and you feel like you’re in over your head.

Rolling over your IRA to a 401(k) will allow you to give up some control, potentially serving as a better fit for your investment needs.

Delay Required Minimum Distributions (RMDs)

Workers with traditional IRAs and 401(k)s both face the same reality when it comes to taking mandatory distributions.

The IRS requires that you begin taking distributions by April 1 of the year following your 73rd birthday (75th birthday for people born in 1960 or later). However, you may delay taking RMDs from your 401(k) if you’re still working and own less than 5% of the company that sponsors the plan.

Plan ahead for taxes in retirement and calculate your RMD today.

Required Minimum Distribution (RMD) Calculator

Estimate your next RMD using your age, balance and expected returns.

Quickly estimate your RMDs and when to take them

RMD Amount for IRA(s)

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RMD Amount for 401(k) #1

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RMD Amount for 401(k) #2

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About This Calculator

This calculator estimates RMDs by dividing the user's prior year's Dec. 31 account balance by the IRS Distribution Period based on their age. Users can enter their birth year, prior-year balances and an expected annual return to estimate the timing and amount of future RMDs.

For IRAs (excluding Roth IRAs), users may combine balances and take the total RMD from one or more accounts. For 401(k)s and similar workplace plans*, RMDs must be calculated and taken separately from each account, so balances should be entered individually.

^*The IRS allows those with multiple 403(b) accounts to aggregate their balances and split their RMDs across these accounts.

Assumptions

This calculator assumes users have an RMD age of either 73 or 75. Users born between 1951 and 1959 are required to take their first RMD by April 1 of the year following their 73rd birthday. Users born in 1960 and later must take their first RMD by April 1 of the year following their 75th birthday.

This calculator uses the IRS Uniform Lifetime Table to estimate RMDs. This table generally applies to account owners age 73 or older whose spouse is either less than 10 years younger or not their sole primary beneficiary.

However, if a user's spouse is more than 10 years younger and is their sole primary beneficiary, the IRS Joint and Last Survivor Expectancy Table must be used instead. Likewise, if the user is the beneficiary of an inherited IRA or retirement account, RMDs must be calculated using the IRS Single Life Expectancy Table. In these cases, users will need to calculate their RMD manually or consult a finance professional.

For users already required to take an RMD for the current year, the calculator uses their account balance as of December 31 of the previous year to compute the RMD. For users who haven't yet reached RMD age, the calculator applies their expected annual rate of return to that same prior-year-end balance to project future balances, which are then used to estimate RMDs.

This RMD calculator uses the IRS Uniform Lifetime Table, but certain users may need to use a different IRS table depending on their beneficiary designation or marital status. It's the user's responsibility to confirm which table applies to their situation, and tables may be subject to change.

Actual results may vary based on individual circumstances, future account performance and changes in tax laws or IRS regulations. Estimates provided by this calculator do not guarantee future distribution amounts or account balances. Past performance is not indicative of future results.

SmartAsset.com does not provide legal, tax, accounting or financial advice (except for referring users to third-party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States). Articles, opinions and tools are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual. Users should consult their accountant, tax advisor or legal professional to address their particular situation.

401(k) Loan

Another benefit of rolling over IRA assets to a 401(k) is the potential ability to borrow money from your retirement savings without triggering the taxes and penalties associated with an early withdrawal.

However, you’ll have to repay the loan with interest, or the outstanding balance will be considered a taxable early distribution.

Early Access

Money in an IRA usually cannot be withdrawn before age 59.5 without triggering the government’s 10% early distribution penalty.

Under the Rule of 55, assets in a 401(k) may be eligible for withdrawal at age 55.

Legal Protection

Moving money into your current employer’s 401(k) will also shield your retirement savings from creditors, lawsuits and potential bankruptcy. Federal law protects assets in 401(k) accounts in the event of legal troubles.

Backdoor Roth IRA

If someone is considering a backdoor Roth IRA strategy, having pre-tax IRA funds can complicate the process due to the pro-rata rule.

Rolling an IRA into a 401(k) clears out pre-tax IRA balances, making the backdoor Roth process simpler and more tax-efficient.

Reasons Not to Roll Your IRA Into Your 401(k)

To be clear, the IRA-to-401(k) rollover isn’t a cure-all. There are specific drawbacks and limitations of moving your retirement savings to your 401(k) plan, which may deter some investors from going this route.

Loss of Control

The most significant benefit of an IRA is the power and flexibility to invest your money how you want.

By rolling over your IRA, you’ll be forfeiting a lot of that control and freedom. Your 401(k) plan likely offers a limited number of mutual funds and exchange-traded funds (ETFs), so you may feel restricted by those offerings if you value greater diversification and oversight.

Roth IRA

Roth IRAs are popular and powerful investment tools because contributions are taxed before they are deposited into your account. As a result, your earnings grow tax-free, and you won’t see taxes when you withdraw.

The problem? Roth IRAs can’t be rolled over into 401(k) plans.

How to Complete an IRA to 401(k) Rollover

A man reviewing the benefits and drawbacks of rolling over an IRA to a 401(k).

When rolling over your IRA to a 401(k), the first step is to check whether your employer’s 401(k) plan even accepts IRA rollovers. Not all plans will allow you to roll over IRA assets. If they do, request a direct transfer to avoid any income tax or the 10% early withdrawal penalty.

If a direct transfer isn’t an option, your IRA provider will send you a check for 80% of your account’s value and withhold the remaining 20% for taxes. You must deposit 100% of the value of your IRA into your 401(k) within 60 days; otherwise, the transaction will become an early distribution, triggering the 10% penalty, as well as income taxes.

The 20% that your IRA provider withholds will serve as a tax credit when you file your tax return.

Investment Considerations Before Moving an IRA into a 401(k)

Before initiating a reverse rollover, it is worth examining how the move will affect your investment strategy.

IRA platforms typically offer far broader fund menus, including low-cost index funds, sector funds and individual securities. Moving IRA assets into a 401(k) means adopting the plan sponsor’s lineup, which may be more limited and carry higher expense ratios.

Some plans offer strong institutional share classes and stable value funds that are not available to retail investors, but others provide a narrow menu that may restrict how you build or rebalance a diversified allocation.

Fees also vary. Many workplace plans include administrative costs that do not apply to IRAs, and these expenses can influence long-term performance.

Review the plan’s summary annual report and investment disclosures to see how costs compare to what you currently pay. If your 401(k) offers access to institutional-priced index funds, the fee savings may outweigh the loss of flexibility.

Finally, consider how a reverse rollover affects your ability to execute your future tax-planning strategies. Once assets are inside a 401(k), you cannot harvest losses, convert small portions to Roth or manage required distributions at the account level. These tools matter for retirees and high-income savers who prefer tight control over timing and taxable income.

Balancing these factors can help you decide whether the consolidation supports your long-term financial plan.

Bottom Line

A senior couple reviewing requirements to complete a rollover from an IRA to a 401(k).

Like a regular 401(k) rollover, a reverse rollover has its pros and cons. By moving money from an IRA to a 401(k) you’ll benefit from stronger legal protections. You’ll also potentially delay your RMDs and have access to your money at age 55 in some instances.

However, rolling over an IRA to a 401(k) comes with some drawbacks, namely the ability to invest your money how and when you want. An investor who values convenience over control may like this option and request a direct transfer to avoid any taxes or penalty.

Saving Tips for Retirement

A financial advisor can help manage your retirement savings based on your specific needs and goals. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Remember that Social Security payments are an important part of your retirement plan. Use SmartAsset’s Social Security calculator to see what your payments might look like.