Retirement Rollover Flexibility Act
Term Dictionary
If you come across any unfamiliar words while reading, these resources can help make everything clearer. Pick whichever one works best for you!
- Congress.gov Legislative Glossary - Comprehensive congressional terms
- NVFC Congressional Terms Glossary - Concise, easy-to-understand definitions
The gist
Lets savers transfer money from a Roth Individual Retirement Account (IRA) into a workplace designated Roth 401(k). Currently, rollovers only go one way ā€” from 401(k) to IRA.
Who wins, who loses
- Wins: job-changers with small Roth IRAs, auto-portability providers, workers wanting one consolidated retirement account.
- Loses: IRA custodians losing accounts to employer plans; minimal impact on federal revenue.
What it does
- Amends Internal Revenue Code Section 408 to allow direct trustee-to-trustee Roth IRA-to-401(k) transfers.
- Limits rollovers to a saver's only Roth IRA, with balance caps tied to auto-portability rules.
- Treats the full rollover as 'investment in the contract' to avoid surprise taxes on earnings.
- Applies to distributions made after the bill's enactment date.
Why should I care?
Supporters say it stops small Roth IRAs from getting stranded when workers switch jobs, boosting long-term savings. Critics argue the rule mainly benefits the auto-portability industry and adds tax-code complexity most savers won't use. Either way, it shapes how future paychecks grow into retirement money. Where do you land? Vote below and use "Tell Your Rep" to make sure your voice reaches Congress.