A direct rollover is the movement of retirement assets from an employer retirement plan or similar plan directly into another retirement plan, such as an IRA. Direct rollovers typically occur when there is a change in employment or another triggering event that causes the investor to want or need to move money out of their old employer retirement plan into an IRA.
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Why choose a direct rollover?
Tax advantages
With a direct rollover, the funds are never in your hands, so there's no mandatory 20% federal tax withholding. Your entire balance moves to your new IRA.
- No taxes withheld: 100% of your assets are transferred.
- Broader investment choices: IRAs typically offer more options than employer plans.
- Consolidation: combine multiple retirement accounts for easier management.
- No time pressure: no 60-day deadline to worry about.
Direct rollover versus indirect rollover
| Feature | Direct rollover | Indirect rollover |
|---|---|---|
| Tax withholding | None | 20% federal tax withheld |
| Time limit | None | 60 days to complete |
| Frequency limit | Unlimited | One per 12-month period |
| Risk of penalties | Minimal | Penalties if deadline missed |
How to complete a direct rollover
Open a Janus Henderson IRA or identify the existing account to receive the rollover.
Contact your former employer's plan administrator to request a direct rollover.
Complete the rollover form from your former employer's plan.
Monitor the transfer—most rollovers complete within two to four weeks.