Rollovers

Rollover from IRA to IRA:

A method of moving IRA funds from one IRA to another of the same plan type. You would take possession of the funds and put them back in an IRA within 60 days. Only one rollover contribution is allowed per 12-month period, per IRA. This type of Rollover is reported to the IRS.

  • Avoids 10% premature distribution penalty on money withdrawn if re-deposited within 60 days
  • Allows access of funds for 60 days without claiming as income
  • Provides portability of IRA dollars
  • Funds continue earning tax deferred interest once placed back into an IRA

Rollover from a Qualified Plan:

A method of moving Qualified Plan funds to a Traditional IRA. The funds invested in an IRA Rollover maintain a tax-deferred status, postpone taxation and earn tax deferred interest until withdrawn. This type of Rollover is reported to the IRS.

For example:

  • If you change jobs and want to keep the advantages of the assets built up from your previous employer’s retirement plan, you can establish an IRA. Let’s say you “roll” $5,000 into the IRA.
  • The IRA acts as a Traditional IRA, so all $5,000 goes directly into the IRA – without tax – where it continues to grow.
  • When you decide to withdraw money from the IRA, you will pay taxes on the money each time you make a withdrawal.
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