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The $3,000/yr limit is for CONTRIBUTIONS.

A rollover from a 401k to an IRA is not considered a contribution, it is considered, oddly enough, a ROLLOVER. There is no limit on the amount you can roll over from a 401k to an IRA.

On a similar note, when you roll over your 401k, it will be going into a traditional IRA (a.k.a. pre-tax IRA). At that point, you can leave it in there indefinitely or you can roll it over again (in part or in whole) to a Roth IRA. You amount you roll over will be considered ordinary income, and you'll have to pay taxes on it. If at all possible, pay those taxes from outside the Roth so you can maximize the tax-free growth inside of the Roth.

-Agg97
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