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Can I rollover between Betterment retirement accounts (401(k), IRAs, etc.)?

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Can I rollover between Betterment retirement accounts (401(k), IRAs, etc.)?

Yes, you can roll over funds between Betterment retirement accounts, but the process varies depending on the types of accounts involved. Below are the scenarios covered in this FAQ, with detailed instructions provided for each:

  • Inactive Betterment 401(k) to Active Betterment 401(k): Rolling over funds from a terminated Betterment 401(k) to an active plan.
  • Inactive Betterment 401(k) to Betterment IRA: Converting an inactive Betterment 401(k) into an IRA as part of a distribution process.
  • Betterment IRA to Betterment 401(k): Transferring funds from a Betterment Traditional IRA into a Betterment 401(k).
  • Betterment Traditional IRA to Betterment Roth IRA (Roth Conversion): Converting a Traditional IRA to a Roth IRA, which has different tax implications and requirements.

How do I rollover funds from an inactive Betterment 401(k) to an active Betterment 401(k)?

To complete a rollover between an inactive 401(k) and an active 401(k) at Betterment, follow these steps:
  1. Log in to your Betterment account from a web browser.
  2. Generate Your Rollover Form:
    • Navigate to Transfer or rollover > Rollover to Betterment > 401(k) rollover.
    • Answer the prompts to provide details about your inactive 401(k).
    • This will generate a downloadable PDF Rollover Form.
  3. Important: If your plan contains both Traditional and Roth funds, repeat the above steps for each portion.
  4. Reference the Form:
    • Access your generated Rollover Form anytime by going to Documents > Other Documents within your account.
  5. Initiate the Distribution of Funds:
    • Go back to your Betterment account and select Transfer or rollover > Withdraw.
    • Choose the option: Rollover to an external retirement account.
    • Enter your active Betterment 401(k) plan information and use the mailing address below for the check:

      Betterment 401(k)
      PO Box 208435
      Dallas, TX 75320-8435

  6. Processing Time:
    Once both steps are completed, the rollover will finalize within 7–10 business days.

How do I rollover from an inactive Betterment 401(k) to a Betterment IRA?

You can rollover your inactive Betterment 401(k) to a Betterment IRA as part of the distribution process. Here’s how:

  1. Log in to your account from a web browser (this process cannot be completed via the mobile app).

  2. Select Transfer or rollover in the top-right corner, then choose Withdraw from the drop-down menu.

  3. Choose your inactive 401(k) account from the list.

  4. On the 401(k) Withdrawal Options screen, select Rollover to a Betterment IRA.

  5. Complete the prompts to finalize your request.

  6. If you have both a Traditional 401(k) and a Roth 401(k), repeat the process for each account.

  7. Once your request is submitted, the funds will be transferred to your Betterment IRA within 5–7 business days, pending plan sponsor approval.



How do I rollover my Betterment IRA into my Betterment 401(k)?

Rolling over your Traditional Betterment IRA to your 401(k) at Betterment is straightforward. Please note: Roth IRAs cannot be rolled over into a 401(k) per IRS rules.

Steps to Rollover a Betterment Traditional IRA into a Betterment 401(k):
  1. Log in to your Betterment account from a web browser.
  2. Generate Your Rollover Form:
    • Navigate to Transfer or rollover > Rollover to Betterment > 401(k) rollover.
    • Answer the prompts to create your PDF Rollover Form, which is required for processing.
    • Find the form later in Documents > Other Documents.
  3. Next Steps:
    • Once you’ve generated the form, open our chatbot and submit the phrase “Betterment IRA to Betterment 401(k) rollover assistance” The bot will submit your rollover request to our team to processing.
    • Betterment Support will process the transfer internally within 5–7 business days.

How do I rollover a Betterment Traditional IRA to a Roth IRA?

This process is called a Roth Conversion. Before proceeding, learn more about the tax implications of a Roth Conversion.

Steps to Convert Your Traditional IRA to a Roth IRA:
  1. Log in to your Betterment account from a web browser.
  2. From the left-hand menu, navigate to Settings > Accounts > Traditional IRA.
  3. Click Convert IRA to Roth and follow the prompts to complete the process.
  4. Important Notes on Roth Conversions:
    • Conversions are attributed to the calendar year they are completed.
    • If you’ve recently made a deposit into your Traditional IRA, you must wait until the deposit has settled to proceed. Attempting to convert funds before they settle will result in an error.
      • You can check the status of your deposit by navigating to the Activity page in the left-hand menu.

Tax Implications of Rolling Over Retirement Accounts

Rolling over funds between Betterment retirement accounts may have tax implications depending on the account types involved. Below are some key considerations:

  • Traditional to Roth IRA Conversions: Converting a Traditional IRA to a Roth IRA is considered a taxable event. The amount converted will be treated as taxable income for the year. It's important to account for this when planning your taxes.
  • 401(k) to IRA Rollovers: If you roll over a 401(k) to an IRA of the same type (e.g., Traditional to Traditional), there are no immediate tax consequences. 
  • Reporting on Tax Returns: You will receive a Form 1099-R for rollovers.