Transfers, Rollovers, & Contributions for Your Self-Directed IRA
15 Apr 2026 · 25 min
In this episode of the Directed IRA Podcast, host Mark Kohler and co‑host Matt Sorenson walk listeners through the three primary ways to fund a self‑directed IRA—IRA‑to‑IRA transfers, direct contributions (including backdoor Roth strategies), and 401(k) rollovers. They explain the step‑by‑step process for each method, the paperwork and timing involved, and common pitfalls such as needing to sell assets before moving cash, the need for an open receiving account, and the slower, mail‑based nature of rollovers. The conversation also covers related topics: using a Coverdell ESA (including a crypto‑covered option), contribution limits for 2026, the importance of getting money into the account as early as possible (citing a Forbes study), fee comparisons between self‑directed IRAs and traditional 401(k)s, and the value of conducting an annual personal financial audit. Throughout, the hosts stress that the self‑directed IRA is an open‑architecture vehicle that lets investors choose any permitted asset, and they encourage listeners to use Directed IRA’s funding team, portal, and resources for assistance.
Chapters
Welcome everybody to the Directed IRA Podcast. My name is Mark Kohler. I'm here with Matt Sorenson on our top 10 series of the first things you need to know, the FAQs if you want, the how to get started, welcome to IRA series. I am so excited. We're at part 2. We're just getting going.
Yeah, this is where the fun stuff happens. We're gonna talk about getting money into your self-directed IRA account. We've talked about what is a self-directed IRA already, how you open one. Now we wanna talk about getting the money in, 'cause that's step 2 in the process. We're gonna get to step 3 here later, which is actually investing the money. But you need to get money into the account, whether you're doing a transfer, a rollover, or a new contribution. We wanna talk about that so you understand the rules. And how to access this existing pot of retirement plan dollars you may already have.
Now, I was about to say this is my favorite part or fun part, jokingly. And then I realized, no, this is not, this is not an easy, it's not hard, but I want to give you guys a little forewarning. If you listen to our first podcast and you're like, oh my gosh, this is awesome. I want to self-direct. I've heard about this. I have a friend doing it. Okay. I want to get equipped, I want to learn. And you're like, okay, step 2, I got to get an account open and fund it. This can be a little laborious. You know, it's going to require some paperwork. You might have to rip that, what do they say, that gun from the cold dead hands of your Fidelity broker or whatever. You know, like you're going to have to try to get that money sometimes moved over and it can't. And sometimes it's not easy. So I don't want to set the wrong tone here. It could be done in 24 hours. You may make a contribution, done tomorrow. But I'm just forewarning you, getting the money in there could be a little bit of a challenge. Is that okay to say, Matt? Like, I don't want to be Debbie Downer.
Yeah. And I think it's— I think it can be easy, but just make sure you're knowing what to do here. And that's the point. We want to walk you through the steps so you understand and your expectations are set right. And let's just talk about the first one out of the gate and let's just get into it. Because this is actually the easiest way.
The easiest part.
And luckily the easiest is the most common. All right. Which is, hey, I already have that IRA at TD Ameritrade or Fidelity, and it's a traditional IRA. And I opened up a traditional self-directed IRA with you guys at Directed IRA. What do I do? All right. Pretty dang easy. Let's say you want to— you want $200,000 to self-direct. You have $500,000 in that Fidelity IRA. You're going to sell $200,000 of stock or whatever you have there to cash, 'cause you're going to be buying a new self-directed investment, so you need cash. So you're going to have $200,000 sitting in cash in your Fidelity account. Then you're going to do a transfer request. This is a form on our end. You will complete it with us. You can do it fully online in our portal. We receive that request. As a licensed regulated custodian, we can send that request to Fidelity and they will send us the cash from your account. Easy peasy. If it's someone like a Fidelity or a Schwab, this is gonna take 3 to 5 business days for this cash to show up in their account because it's a transfer. So when you're going IRA to IRA, where this is your Roth IRA at Merrill Lynch, your traditional IRA at Fidelity, your SEP IRA at, you know, Robinhood, I don't care, these transfers come over relatively quick 'cause they're IRA to IRA. And we'll receive those, place them in your account. They usually come by wire, and then they're gonna be available to you. So you might have, if you're looking to make an investment, you might have a week's time before that money's ready. So the transfer's an easy one, and the important thing to know is we initiate that for you. So you're completing the request on our form indicating, hey, this is my Fidelity account, it's account number 1234, transfer over $200K. And you can move the whole thing, you could just move a partial amount, whatever you want. I love it.
And let me say it a different way too, maybe even in bigger baby steps, is some of you might want to just go get that transfer form going, but there's one important step in there. You have to open the account where the money's going to come. So you have to have that receptacle account, receiving account open. So you can go to our website right now. It's super easy within minutes, hours, whatever, because there's going to be some emails and it's a financial account. Highly regulated, so you're going to have to do double authentication crap and all that kind of stuff I hate. But anyway, you go open the account, you're going to get an account number, and when you get on your dashboard, you'll be able to start that transfer. And the forms are all there. But if at any point you have any problems, we have our chat, live chat during business hours, our phone, our people on the phones are amazing. So they're going to help answer any questions. But Get the account open, get that account number, and then request that transfer into that account number. Can I say one thing, Matt, on this point too? Some of you may already be going, well, I want my Tesla stock to come over here. Well, yeah, that's not the purpose here. Leave what Tesla stock you want at Merrill Lynch or Fidelity or Schwab. Bring over the— sell what you— there's not going to be a tax when you sell. Sell the Tesla stock that you want that money to do something different, something new. So you can't bring the asset over. You're going to bring cash over and you've got to sell it to do it. But that's a good thing because now you've got this cash to do this cool project you've been envisioning.
Yeah, and that's a really important point. Most people are setting up a self-directed IRA because they have a private investment. They want to invest in a real estate deal or in a private fund, or they're going to do a crypto IRA and buy crypto. They need cash to make that new investment. So you're going to be typically transferring over cash, but you don't You don't have to. You could transfer over the Tesla stock. You can buy a mutual fund in your account at Directed IRA. All right, we have a no trade fee on mutual funds now. So we can, it's called an ACAT, we can move that public asset over. It's not the common route, but if you're like, well, I want to just get that money over there so when I find that private asset, I'm ready, we can do that too. And you can buy a mutual fund or a target date fund or an ETF, or you could buy the Tesla stock here if you wanted. Now, most people don't 'cause they're like, well, Matt, Buying Tesla stock is free at my Fidelity or Schwab IRA because they get payment for order flow. That's how they make money. We don't do that. So we're a private asset custodian. We're not a broker-dealer. So when you— so you might— and we have lots of clients who, they have their Fidelity IRA, their Schwab IRA. That's frankly most of them. They have their self-directed IRA with us that has that money that they're looking to self-direct. But there's not a wrong or right way to do it. Those are going to be the options on transferring. One other thing I did want to note, we get this quite a bit. Well, Matt, I have a traditional IRA at Schwab, but when I come self-direct, I want to do a Roth account because I think this investment has a big potential and upside. So we have something called a Roth conversion app. If you're going to be in that boat where you're like, I want to immediately be Roth when I come over, we have an exact Roth conversion app that opens a traditional IRA and a Roth IRA at the same time. It authorizes a conversion. So we'll receive that transfer of the traditional funds from Schwab into your traditional IRA. We immediately convert it and can close that traditional IRA out. So for any of you that want to just go to Roth from traditional right out of the gate, we have a solution for that. And that's happening in this funding process, right? When you transfer the funds over.
I'm just making a note, another point I want to make a little further down the path here. Can I bring up number 2 option? Contribution.
Again, the most common, the least common. Yeah, most of them would be transfer. Now let's go to least common, then we'll come back. Make me feel bad.
Okay, sorry. This is the most common for me. And I guess this is common for me because I've been an entrepreneur my whole life. And whenever I put money in a retirement account, I'm putting it in. I don't have someone putting money in a 401(k) for me. That only happened in the last few years of our companies as they've grown. So I can play in a regular 401(k) like my employees. And, and so I think some of you out there like, well, I'm starting from scratch. I want to put money into this account. I'm coming from an entrepreneurship lifestyle. No one put a 401(k) together for me or whatever the case may be. So anyway, that's probably why it's common for me. But if you want to contribute, same process, open your new account that you want to open. Say it's a traditional IRA or a Roth IRA. And then once the account's open right there on your dashboard, it can say Contribute. And there's different ways to do that through ACH, or you can mail in a check, or you can blah, blah, blah. But you can look at all the options there and you're just going to put the money in based on your contribution amount. And I was— this is what I wrote down, Matt. I'm going to piggyback Matt's point. If you say, well, I want to do a Roth, but I make too much money. No, you don't. There is a way to do it. It's called a backdoor Roth. And so we've already anticipated that for you. So if you're a high-income earner and you want to open a self-directed directed Roth, holy crap, you can do it. And we don't make you open 2 accounts to do it. We have a fast-tracked method that says, oh, I'll make a traditional deposit and then convert it to Roth on day 2. There's no tax. You're allowed to do that because you don't get a deduction when you contribute to a traditional because you make too much money. So the minute you convert it to Roth, there's no tax either. It's freaking awesome. And so that, we've got other podcasts on that, but If you want to contribute to a Roth and you make too much money, just know there's a, there's a step in there and it's literally an account type called backdoor Roth.
Yeah. And on your contributions, remember for 2026, right now it's $7,500 a year plus $1,100 for any of you 50 or older. You can still make your 2025 contributions up until April 15th for the prior year. So we're in this time in March right now of 2026 where you can actually make both years' contributions. So if you haven't funded, you can make double contributions right now, $7,000 for $7,500 for 2026. You could put $14,500 into a traditional IRA, Roth IRA, whatever IRA account you wanted to do. If you got a spouse, do the same thing for them. You got kids, let's drop some, if they had earned income, you paid them in your business, or they have their own summer job, they could be doing that too. Now, when you open your account, you can link a bank account right there to make your contributions. All right? And a lot of people just do it in a lump sum. So you just, you know, you could do it, you know, payments over time, but you just put the whole lump sum in. That's what I like to do. 'Cause I'm like, if you haven't made that money yet, let's get that whole thing invested. Why wait and draw it out? Let's start investing if you have that available funds to get it in. So, that's the contribution method. Now remember, there's an annual amount you can put in each year. HSA's a little different. All the different account types, you have an annual amount. And our team can help with that if you have questions. You have a ton of resources on our site. But that's, you do that really on your own right there in the portal, linking your own bank account through Plaid and we were just ACHs right into your account.
Now, before you move to number 3, Matt, if I can make 2 other comments real quick, is just as a fun thing I'm doing right now, literally this week, it's on my to-do list, is my grandkids' Coverdell account. So a Coverdell is an educational IRA. It's separate from the Trump accounts or a 529 or a Roth. A Coverdell, you can put up to $2,000 into anybody's account. And we have a crypto covered L. So I can buy crypto for my grandchild that I think 15 years from now that crypto's going to be worth a lot more. And I can do $2,000 per child up to April 15th for the prior year. And if I make too much money, I'm going to gift it to my kids and they can put it in. So we have a methodology for that. I've got articles and videos on that as well. But you could be saying, hey, well, I'm in the process of this. Think big, 'cause we're going to teach you about IRA LLCs down the road. You might want to pool money to do some projects. So get those other accounts funded while you're in the thick of it, while you're getting familiar with the process. Another point that I like that Matt's made over the years, and I wish I could, I steal it when I can, is don't wait to say, well, I'll open the account, but then I'll put the money in when the investment's ready. There's this Forbes study, Matt, that I'd love to hear you talk about it just real quick, that waiting to put the money in.
Yeah.
Is, is not your best methodology.
Yeah. I mean, there's a couple of important points on that. One is there is just an analysis of people who had million-dollar-plus retirement accounts. They put their money in as soon as possible. That was a trend. Like, they didn't contribute on April 15th, 2026 for their 2025 contribution. They contributed in January. Of 2025 and had a whole year and 3 additional months or 4 additional months of investment growth rather than everybody else who waited until the deadline. So the first principle is get your money in and get it invested. Now you can sit in cash or it directed if you have an investment immediately available. If you're like, well, I'm not going to be in— the investment's not going to come up for 3 to 6 months. You can buy a mutual fund for free here. All right. If you want, you don't have to sit in cash. And some people think the market's going to go down anyway, so they want to be in cash. But whatever your perspective is, you can buy those and be in the market while you're waiting for an investment if that's where you want to be. The second point is you want to be ready. You know, there's a good saying out there. I picked it up from a friend named Hohn that is, you know, be ready so you don't have to get ready. All right. So how am I ready to self-direct? Well, you have your money in there. You're ready to go. Whether this is a new contribution, transfer, rollover, whatever it is, get the money in there so it's ready to go. When you find that deal, you can go act on it and there's less hustle and stuff you got to do and scrambling. As many of you know, when you make an investment, you know, there's some work, you know, there's a process. And if the money's there and ready to go and maybe it is in the market when you're directed IRA account, maybe it is the free mutual fund purchase you did where now it's we just need to sell that and your cash is back in your account tomorrow, done, and you're ready to go into that investment rather than having to transfer it over and get the money over from Fidelity or Schwab.
Well, since I heard it from you, can I quote you? Matt Sorenson said, "Get ready, don't be ready." No, "Be ready so you don't have to get ready." So you don't have to get ready. Can I use that? Can I quote you now?
You can use that. I mean, these royalties are going to add up though, because, you know. All right.
Now, the third option to fund your account, which—
and I will say transfers is the most common. And a lot of people are surprised that there's more money in IRAs than there are 401(k)s or another retirement account. So just moving IRA to IRA, really easy. It's IRA custodian to IRA custodian. That's the fastest. We talked about contributions, which is we still have a lot of clients do contributions, but a lot of times it might be in conjunction with the transfer or a rollover. You might be funding your account from all 3 methods, actually. You know, you might be doing a Roth IRA with us And you got an old, you got a Roth IRA at TD Ameritrade. You got a Roth 401(k) from an old employer and you're doing a new Roth contribution and maybe that's backdoor, maybe it's not. And so you could be using all 3 funding methods for the same account even. So let's talk about that third one here, which is the rollover. Transfers and rollovers sound the same, but they're actually different. Transfers means IRA to IRA or HSA to HSA. A rollover is coming from an employer plan to an IRA. So this is your old 401(k) with your prior employer where you don't work, or maybe it's your current employer and you're at retirement age and you can roll out, but you're moving from a 401(k) plan into an IRA. There's a couple of different processes here and timing rules you want to make sure you understand. First, when it's a rollover, your IRA custodian doesn't initiate that. We can't go to you know, Voya or Vanguard where your 401(k)'s at, or John Hancock and say, hey, transfer this money over. In a 401(k), you have to initiate a form on their end. You as the former employee or participant in that 401(k) plan saying, hey, I want you to move this whole 401(k) or X amount of this 401(k) over to my new IRA at Directed IRA. What does the 401(k) provider do when they get this? It goes through a process. It is archaic. They might require something called a medallion stamp on this, which we have, and we can stamp if needed. They may require, um, they may contact you and to confirm it and make— and they may mail you the check to your home. They won't mail it to us, some 401(k) providers. Now, the check will be written out to direct to trust company, but then you're gonna have to receive that check and then mail it to us. And by the way, they do not send that FedEx. All right. They send it like regular mail. And that processing of that check might take a while. So, so what I'm trying to make here, the point, if you can't tell, is the rollover can be kind of a pain. We've got the process down, though. We've done it with all the main 401(k) providers. We've done thousands of them and can help you through the process. We know the form you're going to need. We can help you through the contact points. But it is something that you sign and gets initiated to the 401(k) provider. And then it most of the time is a mail process with the check. So what I would say on the rollover is this is not 3 to 5 business days like a transfer in an IRA once you submit the form. Once you submit the form on a 401(k), it might be 2 weeks before those funds are actually in your account at Directed IRA.
Now tell me if this happens to— maybe 3. Tell me if this happens to Matt, because I, I think a lot of times people, and I've run into this, they go, well, I have an old 401(k). I guess I got to do this rollover. Well, isn't it more times than not that your old 401(k) provider has already kicked it out to an IRA and you just don't know it? And so it's important that you look at the documentation for this old 401(k) and look up in the corner. Is it, say, IRA? Does it say 401(k)? You may even want to call them and go, is this still in an old 401(k)? What is it in? And is it— can I liquidate it and get it to the cash position? Is it in an IRA? Do you recommend that at all, that they kind of do a little bit? They just don't presume the process. What do you think?
I think the only time it will be automatically kicked to an IRA, if it was a small balance account, they can't— a 401(k) provider, many of them will kick their accounts to IRAs, but they can only do that for 401(k) balances that are under $10,000. Oh, so otherwise you would have had to initiate that. So there's a Department of Labor rule that allows 401(k) employers that where you're in a 401(k) plan to say, hey, you don't work here anymore, we're moving your money to an IRA. We don't want you in our employer 401(k) plan anymore. You have a small balance. So, so that will happen on small balance 401(k)s where, like you said, they— you might be surprised it's actually sitting in an IRA. But generally, most of the 401(k) rollovers we're going to be receiving are going to be a higher amount than $10,000. So it's probably still sitting in a 401(k). But it is that process still. And the other thing you noted, Mark, is, you know, you will have to instruct it to be put to cash and then roll over the cash. We receive the cash and then we will— obviously you can make a new investment at Directed into the self-directed investment you have ready. Or again, you can just buy a mutual fund or sit in cash as you're waiting for that investment to come over. But, but the point is, is move quickly on the rollover. Do not delay. Um, a lot of people are coming here and they've got a private fund to go into, they've got a real estate deal they want to do. This needs to happen in like a 30-day window. So you want to be engaged in this. Our team's here to help. We have a whole funding team, by the way, that'll walk you through this, that'll go through the form with you, even if it's your accounts at Fidelity or whoever, John Hancock. We literally— we do— I mean, we do hundreds of these every month with clients. So we can be helpful in that process. You might have done it once or twice before in your life. Let us help you to make sure that your account gets funded. You even book a call with our funding team if you want an appointment to really zero in on it.
You know, just the way you explain that just makes me more upset because freaking 401(k) companies, like the 401(k) machine is so huge and so Evil, do I say? Trillions of dollars. And they, they make it hard to get your money. They're going to keep it if it's a high balance, kick it out if it's a low balance. Anything that serves them, which pisses me off. And so I would just hope any of you listening, that old 401(k), so, so many people I talk to, they're like, I don't even know what's invested in. I don't even know what the return is. I don't even know how to access it anymore. My employer never calls me anymore because I don't work there. Duh. And so it's like, This old account, this, if anything, this is a perfect opportunity for you to go get that fricking money and kick it out to an IRA and take control of it. Because holy crap, I can almost guarantee, I can almost, Matt will not allow me to say it online here, almost guarantee you're going to make more money than what it's invested in in that stupid 401(k) from 9 years ago when you decided your investment tolerance in the lunchroom after a pizza party, because that's probably where it all started.
So, right. Yeah, I'm just so excited.
Excited for you guys to have this money.
Yeah, and I, that's a— I think a lot of people are surprised what their 401k is even invested in. They don't even know. They have no idea. They're— and they're like, well, it's XYZ target date fund. Well, what does that own? I have no idea. They have no idea, you know. And so, um, and if that's you, don't feel bad. That's most people. But let's take some awareness. Let's get engaged on it. Whether you want to be in the stock market, self-direct, crypto, real estate, private funds, small business—
we don't care.
We're not telling you what to invest in. I'm just saying, get involved, be engaged. The self-directed IRA is an incredible tool here. We want to make sure that you're focused on this money, where it's at and how it's being invested. And one last point I'll put on this, on the rollover before we wrap it up, is your 401(k) fees. A lot of people are like, oh, your self-directed IRA, you know that, you know, there's an annual account fee there. I'm not used to that. My 401(k) is free. No, it's not. The average 401(k) is charging you 1.5%. If you had a $100,000 401(k), that's $1,500 a year. You just don't see it because it's nickel and dimed out of your account every month and it's coming right out of the investments. You're not cutting the check or paying it. And so it's eating into your returns. So, so just I want to do a little mindset check there and I say a reality check there on your, your 401(k) actually likely has more fees than you're going to incur with an IRA.
Oh, totally. And I'll just say one last thing too, and we gotta wrap it up, is use this opportunity to do a little audit. Do a little audit and create a personal financial statement. This is a great opportunity to go, you know what? What the hell does my retirement look like? And create a little Excel sheet and start going through all of the accounts you can find. And what are their balances? What are their account numbers? What is my login and password? I do this probably every year. Patty and I will go go through and just like update our financial statement and all of those. And for some reason or another, we got to double authenticate this. I can never say that word. And go like double check all the account balances. And so use this time to really circle the wagons and look at your retirement accounts as a whole, your entire financial statement. And I think you'll find it really rewarding, even though it's going to be a little scary. But you got to do it.
Yeah. The good news is you have the opportunity, of course, to invest the funds as you want to. And I think with the self-directed IRA, the best thing about the self-directed IRA and the whole reason we have a job in a company is not because we want to sell you what we have. We don't want to sell you anything. We only want to sell you the best investment possible, which you get to determine and find. It's not what's on the shelf or on the menu here that we're going to jam down your throat like other providers. It's open architecture. Invest in whatever you want. As long as it's allowed by law, you can do it with a self-directed IRA. But we got to get it funded. This is that critical point, getting the money in so you can go out and make those investments. And if you have questions, our team is here to help. So you can always get an appointment, book with them. You'll be getting emails through the process. When you open your account, you'll see the opportunity to fund your account and book a call with our team if you need that assistance along the way. It's also available to do in the portal. So we're here to help you. Get over to directira.com if you want to get started on this self-directed journey. Book a call with our sales team. We'd be happy to help you. Make sure you're subscribed to the podcast, you're getting our newsletter, all those things so you can get up to speed on all the things self-directing. Thanks for being here. We'll see you next time.
And thank you everyone for listening. A quick disclaimer and reminder: this presentation does not constitute an attorney or CPA-client relationship, and it is always in your best interest to consult competent legal and tax professionals when conducting your own personal transactions.
We also want to make sure you know this is not investment advice or financial advice. We're just trying to give you education, ideas, and strategies you can take to your professionals or conduct your own research on. We'll see you next time.
