This is based on the rules that an individual can roll over a portion of his or her retirement plan balance, rather than rolling over the entire balance. According to the rules, if an individual rolls over only a portion of his retirement account balance, the portion that is rolled over is deemed to include the pre-tax amount first. Therefore, if the participant has a balance of $100,000, of which $20,000 is after-tax amounts, and he rolls over only $80,000, the $80,000 is attributed to his pre-tax balance. If the participant elects to roll over only a portion of his balance, the custodian is required to pay the amount elected to be directly rolled over to the IRA custodian or plan to which the person elected to have the amount rolled over. For the amount that the participant elected not to have rolled over, the plan cannot make that amount payable to an IRA or retirement plan.

For more information, see IRS Publication 575.

This question was answered by Denise Appleby
(Contact Denise)

  1. Can I roll my 403(b) and 457 into other low-cost venders when I change jobs?

    It is very likely than you will be able to roll over or transfer these amounts after you stop working for your current employer. ... Read Answer >>
Related Articles
  1. Retirement

    Tips For Moving Retirement Plan Assets

    Moving assets is common when changing jobs or retiring, but you have to do this carefully to avoid penalties.
  2. Retirement

    How After-Tax Rollovers Affect Your IRA

    Consolidating retirement assets? Make sure you account for pre-tax and after-tax assets separately.
  3. Retirement

    401(k) Rollovers: Which Option Makes You the Most?

    Know the choices that net you the most on a 401(k) rollover – including big tax benefits (capital gains, not income tax) when company stock is involved.
  4. Retirement

    Should You Roll Over Your 401(k)?

    Before moving your retirement funds into another account, consider your options.
  5. Retirement

    5 Benefits of Rolling Over a 401(k)

    Nearing retirement or changing jobs? Here's why you might want to move your 401(k) into an IRA (more investment options, more control).
  6. Retirement

    After-Tax Balance Rules For Retirement Accounts

    Accumulating post-tax assets can work to your advantage. Find out how.
  7. Retirement

    Rolling Over Your 401(k) in Times Of Volatility

    Learn the risks that come with rolling over a 401(k) in times of market volatility, and discover strategies that you can use to cope with these risks.
  8. Retirement

    Moving Retirement Plan Assets: How To Avoid Mistakes

    Sometimes things go wrong in a simple transfer of funds. Make sure you know how to avoid penalties.
  9. Retirement

    Transfer Retirement Savings When You Change Jobs

    Half of Americans lose their nest eggs when they switch careers. Learn why you should avoid this trap.
  10. Financial Advisor

    401(k) Rollovers: The Tax Implications

    The tax rules for 401(k) rollovers can be simple or more complex, depending on which path you take.
  1. Rolling Returns

    The annualized average return for a period ending with the listed ...
  2. Roll Back

    In options trading, exiting one position and entering a new one ...
  3. Options Roll Up

    The move from one option position to another that has a higher ...
  4. Tax Roll

    A breakdown of all property within a given jurisdiction, such ...
  5. Roll In

    A term which refers to including loan costs into the initial ...
  6. Roll Yield

    The amount of return generated in a backwardated futures market ...
Hot Definitions
  1. Nest Egg

    A substantial sum of money that has been saved or invested for a specific purpose. A nest egg is generally earmarked for ...
  2. Denial Of Service Attack (DoS)

    An intentional cyberattack carried out on networks, websites and online resources in order to restrict access to its legitimate ...
  3. Perkins Loan

    A loan program that provides low-interest student loans to undergraduate and graduate students who demonstrate exceptional ...
  4. Wealth Management

    A high-level professional service that combines financial/investment advice, accounting/tax services, retirement planning ...
  5. Assets Under Management - AUM

    The market value of assets that an investment company manages on behalf of investors. Assets under management (AUM) is looked ...
  6. Subprime Auto Loan

    A type of auto loan approved for people with substandard credit scores or limited credit histories. There is no official ...
Trading Center