Roth 401(k) or 403(b) accounts can be rolled into a Roth IRA. Non-Roth accounts can be rolled into a traditional or Roth IRA. You’ll be responsible for any unpaid taxes on the taxable portion of a Roth IRA rollover.
You can avoid required minimum distributions over your lifetime with a Roth IRA. With other retirement plan accounts and traditional IRAs, you’re generally required to withdraw a certain amount every year once you reach age 73.*
If you’re rolling to a traditional IRA, make sure the rollover funds go directly from your old plan’s trustee to the rollover IRA’s trustee or custodian to avoid having income tax withheld on the taxable portion of your distribution.
Keep in mind
Your investment options are limited to what is offered in the plan.
You’re still subject to the rules and restrictions of the plan.
If your vested account balance is $1,000 or less, your plan might cash you out. If your vested balance is between $1,000 and $7,000, your plan might roll your balance into an IRA selected by your former employer.
* For 2024 and later years, required minimum distributions are no longer required from designated Roth accounts.
Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses.
This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
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Effective July 1, 2024, American Funds Distributors, Inc. was renamed Capital Client Group, Inc.
This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.