Let’s roll over your TIAA 401(k)

Do you have a destination in mind for your TIAA 401(k)?

Yes, I already have an IRA No, I need to open one

Looking to roll over into another 401(k)? Moving your old 401(k) funds into a new 401(k) is a good option to consider if you’re happy with the fees and investment options available in your current plan (and your plan allows for 401(k) funds to be transferred in).

We focus on IRAs because they're the more common choice for rollovers. IRAs are “Individual Retirement Accounts” with similar tax benefits as a 401(k) but they aren’t tied to your employer. They often come with lower fees and a wider range of investment options. Plus, you get more control since your employer can't move your funds without your say-so.

How to Roll Over a TIAA 401(k)

Changing jobs — and dealing with old retirement plans — involves a fair amount of planning and additional administrative responsibility. Choosing an investment company to handle your accounts is also a time-consuming process.

Our research shows that neglected 401(k)* plans — or retirement savings accounts left behind with old employers — can cost investors an average of $700,000 in lost retirement savings. This comes from random asset allocation, high fees, and poor investment choices. This is why rolling over your 401(k) can be a boon for your nest egg.

Here, we’ll discuss how to roll over your TIAA (sometimes called “TIAA-CREF”) 401(k) to an account — and financial institution — of your choice.

*401(k) plans are considered qualified retirement plans under current ERISA regulations.

Understanding TIAA 401(k) Rollovers

A rollover is nothing more than a funds transfer from one retirement account to another. Most commonly, rollovers are done when people change jobs, retire, or want to consolidate their retirement savings.

Critically, when you perform a rollover of your employer-sponsored retirement plan, you should be moving money between accounts with the same tax treatment. For instance, tax-deferred (or “pre-tax”) 401(k)s should roll into other pre-tax accounts, like traditional IRAs, and tax-exempt accounts, like designated Roth 401(k)s, should roll into after-tax Roth IRAs. Consistency is important here.

When it comes to moving your New York-based TIAA 401(k), you have two realistic choices:

Direct Rollover. This is generally what we recommend most people do. A direct rollover involves requesting a funds transfer from TIAA to a provider (and account) of your choice. You never personally touch the money, as it flows seamlessly from one financial institution to another. Direct rollovers are the fastest and “least-risk” way to successfully roll over your retirement account.
Indirect Rollover. With an indirect rollover, TIAA will distribute your 401(k) balance straight to you, less tax withholding of 20%*. The onus is then on you to deposit the entire original 401(k) balance into a tax-advantaged retirement vehicle of your choice within 60 days. If you don’t make the deadline, you’ll be liable for ordinary income tax and an early withdrawal penalty of 10%. Ouch!

* As an example, a $100,000 401(k) balance would only net $80,000 if you choose an indirect rollover. But you still might elect this option if you can come up with the funds by other means.

Understanding the difference between the two rollover types is key before you attempt to move money around. As noted, mistakes during the rollover process can cause issues with the IRS — not to mention the expense involved.

Let Capitalize handle your 401(k) rollover for you, for free! We’ve made it our mission to make the 401(k)-to-IRA rollover process easy for everyone. Learn more

Steps to Rollover a TIAA 401(k)

Rolling over a TIAA 401(k) requires a few steps, but it’s a relatively straightforward process.

By following the steps outlined below, you can complete your rollover with ease.

STEP 1

Step 1: Preparing for the rollover process

Before you begin the rollover process, first decide where you’re going to send the money. This could either be a new 401(k) plan with a current employer, or it could be an IRA at a financial institution of your choice.

Also included in the preparation stage is gathering relevant information and documents, such as:

Your TIAA 401(k) account number (check old statements if you don’t know it)
Contact information for TIAA (found on their website)
Your new account information at your chosen brokerage (account number, account type)
Your Social Security number — if TIAA has any trouble locating your account

Try to determine in advance the type of rollover you want to do — whether it’s a direct or indirect rollover. In the grand majority of cases, we recommend going with a direct rollover, though your circumstances may vary.

STEP 2

Step 2: Coordinating the rollover

Now it’s time to initiate your TIAA 401(k) rollover by contacting TIAA and filling out any required forms. You’ll also want to contact your new provider to fill out any paperwork they need and to confirm your new account type and account number.

Different stages of the process may involve providing personal identifying information, so be ready in the event you need to authenticate yourself.

Woman calculating her IRA investment returns — Allocating your IRA savings to investments will help it grow over time.

STEP 3

Step 3: Completing the rollover

Finally, you’ll need to review and sign any necessary documents to release the TIAA to your new provider (check tiaa.org for more details). Once these are complete, all you need to do is wait for the funds to arrive at your destination account. As soon as the funds arrive, you can invest your retirement assets according to your broader asset allocation (i.e., equities, bonds). You can also set up your account beneficiaries as part of the finalization process.

Make sure to keep on top of this: you’ll need to ensure that the funds are successfully transferred from TIAA to the new institution — ideally by direct transfer. You can follow up periodically with TIAA to make sure they’re in receipt of all necessary documents, and you can give the heads up to your new provider so they know to expect an incoming rollover.

If you do elect to do an indirect rollover, make sure to re-deposit your gross 401(k) balance to your new tax-advantaged savings account within 60 days. If you fail to do this, you’ll be hit with federal income tax plus an early withdrawal penalty. These expenses are avoidable, so if you do choose the indirect option, make sure the money finds its way to your new account within the timeframe.

Tips for a Successful TIAA 401(k) Rollover

As noted above, rolling over a TIAA traditional 401(k) can be an effective way to consolidate retirement savings and to take advantage of better investment options. You’ll also find that rollovers often lower your overall fee burden, especially if your old employer’s plan leans on the expensive side.

However, there are some important considerations to keep in mind to ensure a successful rollover.

Tip 1: Avoid common rollover mistakes.If you choose to do an indirect rollover — where the payout funds hit your bank account first — you need to make sure you roll over the entire original 401(k) balance within 60 days. Failing to roll over the funds within 60 days can lead to tax consequences, as well as an early withdrawal penalty. It’s also imperative that you complete all required paperwork on time as requested by either TIAA or the receiving institution.
Tip 2: Understand any potential tax implications associated with your rollover.Rolling over a TIAA 401(k) can have tax implications, depending on the type of rollover you choose and the account you’ve designated to receive the rollover. If you’re uncertain about the tax consequences associated with your rollover, please consult with a qualified tax advisor.
Tip 3: Choose the right institution for your new account. Choosing the right institution is critical to a successful rollover. Retirement account providers offer different investment solutions, fee schedules, and customer service, which is why it’s critical to choose the one that appeals to you most. Many TIAA-CREF accounts only offer mutual funds and annuities (annuity contracts); if you’re interested in other investments, consider another provider.

FAQs

Can I roll over my TIAA 401(k) to Fidelity Investments?

Absolutely. Be sure to contact Fidelity Investments (see their website for their telephone number) to open an account (the account that will receive the money) and confirm the paperwork they need to effect the transfer. You will also need to initiate the transfer from TIAA by calling a plan representative. Have your new Fidelity account number and account type to share with the TIAA transfer team; this way, they’ll be ready to receive your account balance.

Can my TIAA 401(k) be transferred?

As long as you’re no longer employed by the company that used TIAA as its 401(k) plan administrator, you can transfer out your TIAA account at any time. You can also withdraw money from your 401(k) (watch the taxes and penalties) at any time, even if you’re still employed at the same job.

You can draw retirement income from your 401(k) penalty-free after you hit age 59.5. If you choose, you can turn this income into a quasi-retirement annuity.

Can you roll over a TIAA 401(k) to an IRA?

Yes. Make sure you’ve chosen a new provider and opened an account at that provider first. Also, be sure that the accounts you’re working with have the same tax status (i.e., pre-tax to pre-tax, after-tax to after-tax).

If you’re working with pre-tax accounts, you’ll be faced with Required Minimum Distributions (RMDs) once you hit your early 70s (currently age 73, as of 2023). These minimum distributions aren’t a factor if you have Roth accounts.

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Get Help Managing a TIAA 401(k) Rollover

No doubt, changing jobs comes with a great deal of administrative work. Rolling over your 401(k) is part and parcel of that process.