How to roll over your 401(k)
directly into an IRA
(Traditional or Roth)
Follow these instructions to learn how to roll over your current
401(k) into a Traditional or Roth IRA at Schwab.
Key Term
Direct rollover
With a direct rollover, the administrator of your employer-sponsored 401( k) plan delivers your distribution
directly to the financial provider where your IRA is held. Since you never actually take possession of your
assets, there is no mandatory 20% federal tax withholding.
Please consult your 401( k) administrator or dedicated tax professional to understand your situation.
Depending on the type of account you have, there are different rules for withdrawals, penalties, and
distributions. Please understand these before opening your account.
Get started
Before beginning your rollover, make sure you understand the different money sources (salary deferral, Roth contributions, etc.) within your 401( k) prior to electing a distribution.
Questions should be directed to the 401( k) plan administrator or your CPA.
Step 1
If you do not already have a Traditional or Roth IRA
account with Schwab, you’ll need to open one to
begin the rollover process.
In your browser, click Accounts and select
Retirement. Scroll down the page until you see
Traditional IRA or Roth IRA and click Start.
Note: You can also roll over your 401( k) using your
mobile device.
In the Schwab Mobile app, tap Profil , then Open
an Account. Next, tap Retirement, then Open a
Traditional IRA or Open a Roth IRA.
Follow the instructions to complete the process.
Step 2
Contact the firm currently holding your 401 k)
account and let them know you want to roll over
the funds into a Traditional or Roth IRA. They may
require you to complete some forms.
Step 3
Ask the administrator of your 401( k) account to
deposit the funds directly into your Schwab IRA.
Have them write you a check made payable to
“Charles Schwab & Co FBO [Your Full Name].”
Note: To ensure a direct rollover, it is very important
that the check is NOT made out to you directly.
Please remember that errors in this process may
have significant tax consequences and penalties
Step 4
Let the administrator of your 401( k) account know
they can send the check to:
Charles Schwab & Co FBO [Your Full Name]
Reference: [Your 8-digit Schwab account number]
P.O. Box 982600
El Paso, TX 79998-2600
DTC Clearing #0164 Code 40 (Only needed if
securities are sent)
Step 5
Once funds are available in your Traditional or Roth
IRA account, you can decide how you want your
retirement assets invested and select from a wide
range of products to invest them in.
For more information, visit our 401( k) Rollover
Options page.
