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.
InvestingRolling over an IRA can lead to higher returns and other perks; but avoid these common mistakes.
RetirementRollovers allow your tax-deferred retirement assets to grow, even when the world around you is changing.
Financial AdvisorThe IRS has introduced a waiver that under certain circumstances will aid those who miss the 60-day window for retirement plan rollovers.
RetirementYour retirement is fast approaching, but your retirement plan needn't change as quickly.
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.
RetirementFollow the steps detailed below when you need to roll over your 401(k) or IRA account to be sure you preserve tax benefits and avoid penalties.
Financial AdvisorThese are the most common pitfalls investors should try to avoid when it comes to retirement accounts.
RetirementSometimes things go wrong in a simple transfer of funds. Make sure you know how to avoid penalties.