A rollover is a tax-free distribution of cash or other assets to a plan participant, who then contributes the assets to another retirement plan. The contribution to the second retirement plan is called a "rollover contribution."
- Rollovers to a Traditional IRA – Allowed from the following types of plans:
- Another traditional IRA
- An employer's qualified plan
- 457 plan
- 403(b) plan
- Waiver – The IRS may waive the 60-day requirement in the event of a casualty, disaster or other event beyond the taxpayer's reasonable control. An automatic waiver will be granted if failure to meet the 60-day time limit is a result of a financial institution error, and very specific requirements are met.
- Rollovers completed after 60 days – Amounts not rolled over within the 60-day limit are treated as a taxable distribution. They are taxable in the year distributed even if the 60-day period expires in the following year. A 10% early withdrawal penalty may also apply.
- One-year waiting period – An individual may only make one tax-free rollover distribution from a traditional IRA within a 12-month period. There is also a 12-month waiting period of any amount distributed into another IRA.
RetirementAvoid paying excess taxes by learning some simple transfer rules.
Financial AdvisorThe IRS has made it easier and less costly for clients who miss the 60-day IRA rollover window.
InvestingThe Internal Revenue Service is providing some relief to certain taxpayers who may have missed the 60-day window allowed for IRA and 401(k) rollovers.
InvestingRolling over an IRA can lead to higher returns and other perks; but avoid these common mistakes.
Financial AdvisorHere are the things advisors need to consider when advising clients on late IRA rollovers.
InvestingNeed help deciding what to do with your 401(k) plan from a former employer? Here are your options.
RetirementIn the retirement savings realm, rollover refers to transferring the holdings in one retirement account into another.
RetirementHere are the pros and cons of choosing to roll over your 401(k) into a Roth IRA and a traditional IRA.
Financial AdvisorCompelled to rollover your retirement plan? Beware of bad advice, unsuitable options and 'toxic' tactics.
RetirementSometimes things go wrong in a simple transfer of funds. Make sure you know how to avoid penalties.