IRA Rollover Calculator 2026
Calculate the cost of an indirect IRA rollover with 20% withholding, and see how much you'd lose to taxes and penalties vs a direct (trustee-to-trustee) rollover.
The Right Way to Roll Over a Retirement Account
Always use a direct rollover (trustee-to-trustee transfer) when possible. Request your current custodian to send the funds directly to the new custodian — you never touch the money, no taxes are withheld, there's no 60-day deadline, and no risk of error.
Indirect Rollover Traps
If you take an indirect rollover from a 401k, your employer must withhold 20% for federal taxes. To avoid any tax, you must deposit 100% of the original balance (including the 20% that was withheld) within 60 days. If you can only deposit what you received, the withheld 20% is treated as a distribution — taxable income plus a 10% penalty if you're under 59½.
Example: $85,000 401k, indirect rollover. You receive $68,000 (after 20% withholding). To complete a tax-free rollover, you must deposit $85,000. If you only deposit $68,000, the $17,000 is a taxable distribution.