Yes, if your 401 (k) plan allows it, you can transfer a traditional IRA (but not a Roth IRA) to it. This is sometimes referred to as a reverse rollover. If you have a traditional 401 (k) or 403 (b), you can transfer your money to a Roth IRA. However, this would be considered a conversion to Roth, so you would have to declare the money as income when paying ordinary income taxes on income.
If you receive funds from your old 401 (k) plan, you have the option of transferring the 401 (k) plan to an IRA. As long as you contribute an amount equal to the distribution of your 401 (k) plan to an IRA within 60 days of the original distribution, you won't have to pay income taxes or a tax penalty for the distribution. However, keep in mind that if they send you money from your 401 (k) plan, your former 401 (k) plan administrator must withhold 20 percent of that distribution and send it to the IRS. The IRS considers 20 percent to be a taxable distribution.
You'll need to find another source for an amount equal to 20 percent withheld and contribute that amount to your IRA. If you don't, that money will be taxed as ordinary income and will be subject to a 10 percent tax penalty. You can transfer any money from the IRA that you have saved outside of your employer-sponsored plan to a Vanguard IRA through an asset transfer. A reinvestment occurs when you transfer assets from an employer-sponsored retirement plan, such as a 401 (k) or 403 (b), to an IRA.
Nor can you make a transfer during this 1-year period from the IRA to which the distribution was transferred. Section 1.408-4 (b) (ii) of the proposed Treasury Regulation, published in 1981, and IRS publication 590-A, Contributions to Individual Retirement Arrangements (IRAs), interpreted this limitation to apply from one IRA to another, meaning that a transfer from one IRA to another would not affect the transfer of other IRAs by the same person. The easiest and safest way to transfer your 401 (k) plan to an IRA is through a direct transfer from the financial institution that manages your 401 (k) plan to which you will maintain your IRA. You have 60 days from the date you receive an IRA or a retirement plan distribution to transfer it to another plan or IRA.
Most of the pre-retirement payments you receive from a retirement plan or IRA can be “transferred” by depositing the payment into another retirement plan or IRA within 60 days. This change will not affect your ability to transfer funds from one trustee from one IRA directly to another, since this type of transfer is not a transfer (Tax Resolution 78-406, 1978-2 C. The limit will be applied by adding up all of one person's IRAs, including SEP and SIMPLE IRAs, as well as traditional and Roth IRAs, treating them effectively as an IRA for purposes of the limit). If the check is mailed to your home address, you can write your IRA account number on the check before sending it to your IRA provider.
The only difference is that money from an accumulated IRA can later be transferred to an employer-sponsored retirement plan if the plan allows it.