The Complete IRA Rollover Checklist: Everything You Need When Leaving a Job

Introduction

Leaving a job -- whether for retirement, a new opportunity, or a life change -- comes with a long to-do list. Sorting out your retirement accounts shouldn't be the most stressful item on that list. But for many people across Bethany Beach, Rehoboth Beach, Lewes, Ponte Vedra Beach, Jacksonville, and St. Augustine, it often is.

The good news: using a thorough IRA rollover checklist makes a 401(k) rollover to an IRA one of the most straightforward financial moves you can make -- when you're prepared. This IRA rollover checklist covers everything you'll need to gather, decide, and do to get it done smoothly and correctly, whether you're working with our Delaware team or our Florida team.

Print this out, work through it section by section, and don't hesitate to call us if you hit a question you're not sure how to answer.

IRA Rollover Checklist Part 1: Information to Gather from Your Plan

Your 401(k) Plan Details

•       Plan name and provider -- e.g., Fidelity, Vanguard, Empower, Principal, Schwab

•       Account number(s) -- Check your most recent statement

•       Current account balance -- Get an up-to-date figure -- not just the last statement

•       List of current investments -- Fund names, tickers, and share amounts

•       Any outstanding 401(k) loans -- Loans typically must be repaid before or at separation -- or they become taxable distributions

•       Employer stock holdings -- If you hold company stock, ask about Net Unrealized Appreciation (NUA) before rolling over

•       Vesting schedule -- Confirm how much of any employer match you are entitled to keep

•       Plan's rollover/distribution paperwork -- Some plans require forms; others allow online requests

Contact Information

•       Plan administrator phone number and website

•       HR department contact for separation paperwork

•       Name on the account (must match your IRA exactly)

•       Social Security number (required for all account transfers)

IRA Rollover Checklist Part 2: Setting Up Your Receiving IRA

Choose Where to Open Your IRA

•       Decide between a Traditional IRA or Roth IRA -- Most rollovers from a pre-tax 401(k) go into a Traditional IRA to avoid immediate taxation. Roth rollovers are possible but trigger a tax event.

•       Select your IRA custodian -- Your financial advisor, a brokerage, or a bank

•       Open the IRA account if you don't already have one -- Have your Social Security number, government-issued ID, and bank account info ready

•       Confirm the account is open and active before initiating the rollover -- Funds cannot be received by a non-existent account

•       Get the IRA account number and custodian's mailing/wire instructions -- You will need to provide this to your 401(k) plan

Beneficiary Designations

•       Name a primary beneficiary -- Typically a spouse, but review carefully

•       Name one or more contingent beneficiaries -- Important for estate planning -- especially for clients with families in both Delaware and Florida

•       Confirm beneficiary designations are on file with the new IRA custodian -- This step is commonly skipped and can create major complications

IRA Rollover Checklist Part 3: Initiating the Rollover

Request a Direct Rollover (Strongly Recommended)

•       Contact your 401(k) plan and request a direct rollover to your IRA -- Specify 'direct rollover' -- not a distribution

•       Provide the receiving IRA custodian name, account number, and mailing/wire instructions

•       Request the check be made payable to your IRA custodian 'FBO [Your Name]' -- FBO = For Benefit Of. This ensures no taxes are withheld.

•       Ask for a timeline -- Typically 5-15 business days, but some plans take longer

•       If a check is mailed to you, deposit it into your IRA within 60 days -- Missing this window triggers taxes and potential penalties

Track the Transfer

•       Note the date the rollover was requested

•       Confirm receipt with your new IRA custodian once funds arrive

•       Verify the full amount was received

•       Get written confirmation from both the old plan and the new IRA custodian

IRA Rollover Checklist Part 4: After the Rollover Is Complete

Investment Decisions

•       Review your investment options in the new IRA -- Unlike a 401(k), you now have access to a much broader range of investments

•       Decide how to allocate the rolled-over funds -- Work with your advisor to align this with your overall retirement income plan

•       Avoid leaving the funds in a default cash or money market position for an extended period

Tax and Reporting

•       Keep all rollover documentation for tax time

•       Your former employer will issue a Form 1099-R reporting the distribution

•       Your IRA custodian will issue a Form 5498 confirming the rollover contribution

•       Report the rollover correctly on your federal tax return -- Direct rollovers are non-taxable but must still be reported

•       Confirm no taxes were withheld from a direct rollover -- If they were, you may need to make up the difference

Loose Ends

•       Close or consolidate any remaining accounts with your former employer's plan if applicable

•       Update your address with your new IRA custodian if you're relocating -- Especially important for clients moving between Delaware and Florida

•       Review your overall asset allocation now that accounts are consolidated

•       Check whether you have other old 401(k)s from prior employers that could also be rolled over

•       Update your estate planning documents if your beneficiary designations have changed

IRA Rollover Checklist Part 5: Questions to Ask Your Financial Advisor

Before initiating the rollover, bring these questions to your advisor at either our Bethany Beach or Ponte Vedra office:

•       Should I roll into a Traditional IRA or consider a Roth conversion?

•       Is there any employer stock in my plan that I should evaluate for NUA treatment?

•       Do I have an outstanding 401(k) loan that needs to be addressed?

•       How should the rollover funds be invested once they arrive?

•       Does this rollover affect my current tax situation for the year?

•       Should I consolidate other old retirement accounts at the same time?

•       How does this rollover fit into my overall retirement income and Social Security strategy?

•       Are there any state-specific tax considerations I should be aware of in Delaware or Florida?

A Note on Timing Your IRA Rollover

There's no required timeline for initiating a rollover after leaving a job -- most plans allow you to keep money in the plan indefinitely. But leaving it behind in an old plan means it's not being actively managed as part of your overall strategy, and you may be paying higher fees than necessary.

Our recommendation to clients across Bethany Beach, Rehoboth Beach, Lewes, Ponte Vedra Beach, Jacksonville, St. Augustine, Ocean City, Berlin, and Salisbury: don't let this IRA rollover checklist gather dust. A quick call to either of our offices can get the process moving, and most rollovers can be completed with minimal effort on your end once the paperwork is initiated.

Ready to take the next step?  Ready to roll over your 401(k) or not sure where to start? We walk clients through this IRA rollover checklist every day from our Bethany Beach, Delaware and Ponte Vedra, Florida offices -- serving the Delaware beaches, Maryland Eastern Shore, and Northeast Florida.

Call us at 302-251-8901 (Delaware) or 904-525-8778 (Florida) -- or visit lwsde.com/schedule-meeting to book your complimentary 30-minute discovery call. We serve clients from our offices in Bethany Beach, DE and Ponte Vedra, FL -- and throughout Delaware, Maryland, Northeast Florida, and beyond.

Also worth reading: Rolling Over Your 401(k): What It Is, Why It Matters, and How to Do It Right