What is a rollover?
A rollover moves money out of an employer retirement plan into an IRA. It's the standard path when you leave an employer, or, with some plans, while still employed past a certain age, and want the funds in an account you control.
Direct rollovers send the money plan-to-custodian without you touching it. Indirect rollovers pay the distribution to you, and you have 60 days to redeposit it into an IRA.
Why does the direct vs. indirect distinction matter?
Withholding and deadlines. Indirect rollovers from employer plans trigger mandatory 20% withholding, you must replace that amount from other funds to roll over the full balance, and missing the 60-day window makes the whole distribution taxable, plus potential penalties.
Indirect rollovers are also limited to one per 12 months across all your IRAs. Direct rollovers avoid every one of those traps, which is why they're the default recommendation.
How does a rollover show up in practice?
You open the self-directed IRA first, then request a direct rollover from the plan administrator to the new custodian. The plan may cut a check payable to the new custodian or wire the funds, either way, payable to the custodian for your benefit, never to you personally.