If you’re looking to set up an IRA rollover account, you’re probably wondering how to accomplish this successfully, without incurring any unnecessary taxes and penalties. Luckily, the IRA rollover process isn’t as hard as it might seem. By understanding basic IRA rollover information, you can set up an IRA account that will enable you to build and grow your retirement savings.

The first thing you’ll need to determine is what kind of IRA account you want to set up.  This can vary widely, depending on your lifestyle and retirement needs.

If you’re unsure about which kind of IRA rollover account will work best for you, you may want to consider the type of account that the money is being transferred from.  For example, if you’re taking money from a Roth IRA, you’ll probably want to move it into another Roth IRA.  The reason for this is that the money in this type of accounts has already been taxed, so that it won’t be taxed upon withdrawal.  If you do a Roth IRA rollover to a traditional IRA, then you’ll wind up paying taxes on the money twice.

On the other hand, if you want to move money from a traditional IRA to a SEP, a Simple IRA or another Traditional IRA, you shouldn’t encounter any problems.  If you’re thinking about moving your funds to a Roth IRA, know that this is a possibility – as long as you meet the Roth IRA rollover 2010 income limits and are willing to pay taxes on the money.  To make sure that this is done correctly, you’ll most likely want to go with a direct rollover to Roth IRA so that your bank can withhold the money that will be needed for the IRS taxes.

If you’re looking to complete a Simple IRA rollover with funds from this type of account, know that you can transfer these funds to almost any other type of retirement account.  However, if your new account is a Simple IRA account, be aware that the only type of rollover it can receive is one that comes from another Simple IRA.  You may also be required to meet minimum time investment restrictions – your financial advisor can give you more details as needed.

Finally, if you’re self-employed or own your own business, you might want to consider an SEP IRA rollover.  The reason for this is that an SEP IRA is a particular type of retirement account that allows you to contribute more money than most other IRAs – up to a maximum of $49,000 each year.  In contrast, traditional IRAs and Roth IRAs typically limit you to contributions of only $5,000 per year.

Once you’ve decided on the kind of IRA rollover account that will work best for you, go to your financial advisor or banking institution and ask them to begin the transfer.  You may need to complete some simple paperwork to indicate when and how the rollover should proceed.  If you have any questions, your advisor or the manager of your new IRA account should be able to assist you.