IRAs have another function. If you are entitled to a lump-sum distribution when you leave an employer with a qualified rollover plan, you can simply rollover it to an existing or new IRA. Don’t worry about co-mingling rollover IRAs and the traditional IRA. That restriction went away some years ago. But, you can’t co-mingle a Roth and traditional IRA rollover accounts. Continue reading
When it comes to IRAs, there are two different ways to rollover your assets between different IRA accounts. The first is what’s known as a transfer, or direct rollover. In this rollover process, one financial institution sends a request to the other for a transfer and the disbursing institution sends a check in return. Because the funds are never transferred to the IRA account holder, the process is not considered to be taxable by the IRS.
The second form of rollover is known as an indirect rollover, or a 60 day rollover. In this case, the original financial institution makes out a check directly to the IRA holder, who must then deposit this IRA rollover contribution into the receiving institution within 60 days. If this deadline of IRA rollover isn’t met, the funds will lose their status as IRA funds, meaning that they may be taxed as ordinary income and subject to additional penalties. Continue reading
Once you’ve found an IRA rollover account that will work for you, you’ll need to determine how to set up the distribution of funds. Generally, there are two different rollover methods for getting the money out of the existing IRA account and into the new one – go over both IRA rollover types before making your final decision.
The first type of rollover called an IRA direct rollover and involves your retirement contributions between the two financial institutions. Your only involvement in the process is to open up the new IRA rollover account and complete some simple paperwork. After that, your new account provider will issue an order to transfer the money to the new account. As long as you’re not doing a direct rollover to Roth IRA, there won’t be any taxes withheld.
On the other hand, if you complete an indirect IRA rollover, the money isn’t issued to the bank, but is given to you in the form of a check. Twenty percent of the total will be withheld off the top for taxation purposes to ensure that you deposit the money into another qualified rollover IRA account. If you do this within 60 days, the withheld funds will be released into the new rollover IRA. However, if you don’t make the deposit within 60 days, the remaining 20% will be used to settle your tax bill, as the IRS will judge the rollover to be a taxable cash withdrawal. Continue reading
In short, all IRA accounts can be targets for some type of rollover – it just depends on the nature and rules of both the originating account and the target account. You may be facing the decision to perform an IRA rollover because you have a new job or because you’ve left a job and want to consolidate your retirement investments in one place. Unfortunately, some of the things that you’ll need to do throughout the IRA rollover process will be determined by factors beyond your control. Continue reading
Rollover IRA accounts are incredibly useful when you have an old retirement account that you want to close, but want to maintain the tax deferred status of your investments. This way, a change in employment will not affect your long range retirement plans. Continue reading
A rollover IRA allows you to consolidate all of those old accounts into one new one, making it easier to manage your investment options and plan for retirement. In addition, most rollover IRA accounts offer a wider range of investment opportunities than your old employer’s plan Continue reading
A rollover IRA is a great tool that’s designed to maximize your retirement investing options while offering the same tax advantages you’ll find with traditional employer-operated retirement accounts, such as the 401k or 403b. However, before you can start contributing to an IRA rollover account, you’ll need to understand what they are and how to set one up.
Why Should I Establish a Rollover IRA?
If you’ve recently left a job or are considering a transition to a new employer, you may be wondering what to do with all of the funds you’ve invested in the company’s 401k or 403b retirement plan. Continue reading