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If you have a 401(k) plan from a previous employer, you can roll over the assets from that account into a new IRA to keep your tax-advantaged retirement plan without tax penalties. As long as the condition of your existing 401(k) permits a rollover, you can open either a traditional or Roth IRA with some of the most popular online brokers.
Best Rollover IRAs
Fidelity: Best overall
SoFi: Best for beginners
Vanguard Personal Advisor Services: Best for advanced investors
Betterment: Best for socially responsible investing
Wealthfront: Best for large accounts
Charles Schwab: Best investment options
Robinhood: Best IRA match
Online Brokers For a 401(k) Rollover
Best Overall Rollover IRA
Fidelity
Fidelity's self-directed brokerage accounts allow investors to buy and sell stocks, bonds, mutual funds, and ETFs. More advanced traders can take advantage of fractional shares, smart trading technology, commission-free trades, and goal-building features.
Outside of Fidelity Go, you can open a Fidelity Wealth Services account, Strategic Disciplines account, or Personalized Planning & Advice account. These accounts are best for hands-off investors who want their assets fully or partially managed by a certified financial planner (CFP).
A Fidelity retirement account gets you access to a handful of helpful tools and retirement calculators, including the guaranteed income estimator and the retirement strategies tax estimator. On top of that, Fidelity allows you to open a brokerage account within your retirement savings account. This gets you access to a broader range of investment options like CDs, foreign securities, mortgage securities, UITs, REITs, and options.
What to watch out for: You may have to pay a 0.35% advisory fee if you have an account balance of over $25,000, plus Fidelity charges higher margin rates than most competitor platforms. Fidelity Go doesn't offer tax loss harvesting. There are also additional fees for any phone or broker-assisted trades.
Best Rollover IRA for Beginners
SoFi Invest
Even though anyone can benefit from a SoFi account, its easy-to-use interface and straightforward planning/goal tools make it one of the best online brokerages for beginners. Moreover, SoFi has no minimum for opening an account and no account or trading fees.
SoFi's robo-advisor creates a personalized portfolio of stocks and bonds based on your retirement goals, risk tolerance, and time horizon. Or you can invest in one of the pre-built ETF portfolios. Robo-advisor accounts offer automatic quarterly portfolio rebalancing, goal planning, recurring deposits, and portfolio diversification tools.
Self-directed accounts are best for active investors. You can buy and sell commission-free stocks, ETFs, fractional shares, and crypto. Some assets (such as crypto and fractional shares) have additional trading fees. If you're a SoFi member, you get access to invest in initial public offerings (IPOs). SoFi is also currently the only online brokerage with plans to distribute Instacart stock, following its IPO in 2023, to users.
SoFi also provides clients with retirement-focused financial tools and planning resources, such as access to SoFi's financial planners, auto rebalancing (limited to automated accounts), goal-building tools, and additional member benefits.
What to watch out for: SoFi isn't a good option for investors looking for tax-loss harvesting or socially conscious investing.
Best Rollover IRA for Advanced Investors
Vanguard Personal Advisor Services
You can roll over a past employer-sponsored 401(k) or 403(b) account into a new or existing traditional or Roth Vanguard IRA. You can invest in Vanguard's diversified blend of US and internal exchange-traded funds (ETFs), mutual funds, and ESG investing portfolios.
Vanguard's fiduciary advisor provides users with ongoing investment guidance, goal-building advice, and active portfolio management. Vanguard Personal Advisor Services also offers tax-loss harvesting, the convenience of a robo-advisor, and a customized financial plan.
What to look out for: Only investors that can meet Vanguard Personal Advisor Services' high
Vanguard Personal Advisor Services review
Best Rollover IRA for Socially Responsible Investing
Betterment
Betterment offers three socially responsible portfolios:
- Broad impact: This portfolio invests in diversified ETFs that are relevant to all environmental, social, and governance (ESG) elements. For example, this includes businesses focused on ethical labor management and lowering carbon emissions.
- Climate impact: This portfolio invests in a diversified ETF portfolio of companies that focus on lowering carbon emissions, don't use fossil fuels, and fund green projects.
- Social impact: This ETF portfolio is a blend of companies that support and are diligently working toward minority empowerment, gender diversity, and all-around social equity.
The platform also offers Goldman Sachs Smart Beta portfolios, cryptocurrency portfolios, and a BlackRock Target Income portfolio.
There's no minimum investment requirement to open an account with Betterment (unless you open a premium plan), and fees are generally low. Betterment also offers tax loss harvesting features.
What to watch out for: To access CFPs from Betterment, you must have at least $100,000 in your account.
Best Rollover IRA for Large Accounts
Wealthfront
- Direct indexing: An enhanced version of tax loss harvesting that allows Wealthfront to harvest more losses by searching for price changes within stocks from the US stock index. This in turn lowers your tax bill.
- Risk parity: Wealthfront uses an asset allocation strategy that boosts your risk-adjusted returns.
Investors can roll over a 401(k), 403(b), or 457 plan to a Wealthfront traditional or Roth IRA. Wealthfront also offers tax loss harvesting, auto rebalancing, and smart beta technology.
The platform offers dividend growth stocks, emerging market stocks, corporate bonds, ETFs, index funds, a high-yield bond portfolio, and more.
What to watch out for: Wealthfront doesn't offer ongoing human advisor access. It also has a higher minimum ($500) to start investing compared to some other leading robo-advisors.
Best IRA Rollover for Investment Options
Charles Schwab
Charles Schwab offers stocks, bonds, ETFs, and CDs, as well as over 200 index funds and 4,000 mutual funds. The brokerage also offers low fees, no account minimum, and commission-free trading.
You can rollover your 401(k) plan easily into a traditional or Roth IRA. Charles Schwab offers both self-directed and automated accounts. But automated accounts only invest in low-cost ETFs, which include Schwab ETFs.
Charles Schwab IRAs get you access to the brokerage's selection of retirement tools, planning calculators (including retirement savings calculator and RMD calculator), the latest market commentary, and insight and investing ideas from Schwab experts.
What to watch out for: Charles Schwab's automated investing platform (Schwab Intelligent Portfolios) requires a much higher minimum ($5,000 minimum or $25,000 for Portfolios Premium).
Charles Schwab Brokerage Account review
Best Rollover for an IRA Match
Robinhood
Robinhood retirement accounts offer both traditional IRAs and Roth IRAs. When you roll over your 401(k) into a Robinhood IRA, you get access to recommended portfolios, compound interest on uninvested cash, and Robinhood Gold benefits ($2,000 minimum to get started).
But the most notable feature of Robinhood retirement savings accounts is the 1% match. Most 401(k) plans have the benefit of an employer match, which is when an employer matches a percentage of the contributions. IRAs don't have this benefit. Robinhood, however, is the first and only brokerage to offer a match benefit. So you'll get an extra 1% on every dollar you deposit into your IRA.
Although Robinhood doesn't offer an automated investing account, the platform does have an automated portfolio builder. Other notable features include Robinhood's educational library, 24/7 customer support, 24-hour market access, and access to advanced market data and professional research.
What to watch out for: Robinhood doesn't offer many advanced charting and investing tools. IRAs don't offer fractional shares, IPOs, or cryptocurrencies.
401(k) Rollover Frequently Asked Questions (FAQs)
Can a 401(k) rollover be done electronically?
Yes. If the brokerage permits it, a 401(k) rollover can be done electronically through a wire transfer.
Where is the best place to put my 401(k) rollover?
The best place for your 401(k) rollover depends on your individual situation. The best brokerage for a 401(k) rollover depends on your goals, desired assets to invest in, level of experience, and how much you're willing to pay in minimums and fees. Make sure to compare all your options before opening an account.
How long do you have to roll over a 401(k) after leaving a job?
You'll have 60 days to roll over your assets from a previous 401(k) plan to a new employer-sponsored plan or IRA. After 60 days, you may be penalized or hit with tax liabilities. You could also lose the tax advantages on your account.
Are rollover IRAs a good idea?
Rollover IRAs are often a good idea since IRAs offer more investment options compared to 401(k) plans, along with tax advantages and increased payout options. Plus if you want to be more hands-on, some brokers offer self-directed IRAs and IRAs for active investors.
What are the disadvantages of a rollover IRA?
Some disadvantages of a rollover IRA include higher fees, no employer match, no loan options, and less creditor protection. Also, if you have stock from your previous employer in your 401(k), you may not be able to roll it over into your new account.
How does an IRA rollover work?
To roll over an existing IRA or 401(k) plan, you can open a new account with either an online or traditional broker. If the broker is eligible for IRA rollovers, you can transfer the asset in your old account into your new account. But keep in mind that company stocks or unvested money won't be eligible to roll over.
Other Online Brokers For 401(k) Rollovers We Considered
Depending on your current 401(k) plan, time horizon, level of expertise, and goals the best online broker for a 401(k) rollover varies from person to person. Are you looking for convenience? Advanced investing tools? An IRA match?
While these platforms may not have earned a spot on the "best of" list for 401(k) rollovers, they may still be a good option for you. Here are some of the IRA rollover runner-ups.
- E*TRADE:
E*TRADE IRA - Brand Name is a great platform for active traders interested in investing in low-cost stocks, ETFs, and options either through a managed, pre-built, or automated portfolio. You can roll over your 401(k) to a traditional IRA or Roth IRA. There's no account minimum to start investing, but you will need at least $500 in your account for automated investing. But E*TRADE doesn't offer tax loss harvesting or human advisor access. - Webull:
Webull - Brand Name is an online brokerage that offers commission-free trading, crypto trading, margin trading, and retirement accounts (including rollovers). The brokerage gets you access to free real-time market quotes, 24/7 customer support, and extended trading hours. But there are no automated investing options and the educational resources are limited. Webull IRAs only allow the trading of stocks and ETFs. - M1 Finance:
M1 Finance - Brand Name has both traditional and Roth IRA account options for 401(k) rollovers, and you can trade stocks, ETFs, fractional shares, and more. It offers both DIY and automated accounts. However, M1 Finance doesn't offer tax loss harvesting or access to human advisors. It also has a higher minimum compared to similar platforms on this list ($500 minimum for IRAs). - Interactive Brokers:
Interactive Brokers - Brand Name is one of the best online brokers for advanced traders, which also offers access to global markets and market analysis. Beginners may also benefit from the platform's more casual version, Interactive Brokers Lite. Interactive Brokers IRAs also allow margin trading and currency products. But the Lite version requires a $100 minimum to start investing, and the Interactive Brokers site is difficult to navigate. It also doesn't provide access to human advisors. - Ally Invest Robo Portfolios: Ally Invest is a great platform for passive investors interested in solely investing in ETFs. The platform invests 70% of your funds into a diversified cash-enhanced investment portfolio based on your risk tolerance and investment goals. The rest of your money is set aside to earn interest. But for a slightly high
Ally Invest Robo Portfolios - Account Minimum minimum, Ally Invest doesn't provide tax loss harvesting or human advisor access.
Why You Should Trust Us: Our Methodology
We used Personal Finance Insider's methodology for rating investment platforms when reviewing online brokers that offer 401(k) rollovers in order to find the best platforms for investment options, low fees and minimums, portfolio types, human advisor access, and customer service. We also favored platforms that offered a range of other features and products, such as tax-loss harvesting, robo-advisor access, and market research. Investment platforms are given a rating between 0 and 5.