Retirement Plans - Rollover Vs. Transfer

An individual may want or need to move their IRA from one custodian to another. There are two ways by which this can be accomplished. An individual may rollover their IRA or they may transfer their IRA.



Rollover



With an IRA rollover, the individual may take possession of the funds for a maximum of 60 calendar days prior to depositing the funds into another qualified account. An investor may only rollover their IRA once every 12 months. The investor has 60 days from the date of the distribution to deposit 100% of the funds into another qualified account or they must pay ordinary income taxes on the distribution and a 10% penalty tax, if the investor is under 59.5.



Transfer



An investor may transfer their IRA directly from one custodian to another by simply signing an account transfer form. The investor never takes possession of the assets in the account and the investor may directly transfer their IRA as often as they like.



Educational IRA / Coverdell IRA


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RELATED FAQS
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    The limitation on rollovers applies on a per IRA basis. In general, if an IRA is involved in an IRA-to-IRA rollover, it cannot ... Read Answer >>
  2. Which of the following statements regarding rollovers versus transfers of IRA accounts ...

    The correct answer is A) When an individual moves “qualified” (pre-tax) money from, for instance, a pension plan into an ... Read Answer >>
  3. Can I return funds to my Traditional IRA after taking a distribution?

    If you take a distribution from your Traditional IRA, you can roll over the amount to the same Traditional IRA or another ... Read Answer >>
  4. Can I roll over a profit-sharing plan to an SEP IRA account without suffering any ...

    It depends. If the transaction is processed as a direct rollover to the SEP IRA, then no taxes will be withheld. Through ... Read Answer >>
  5. What are the rules and reporting requirements for a rollover of a required minimum ...

    An RMD may be transferred between IRAs, but it may not be rolled over once distributed. If the RMD amount is rolled over ... Read Answer >>
  6. Can I move my IRA to a better income-producing opportunity?

    Yes. You may want to compare the IRA products offered by different financial institutions. Once you determine the financial ... Read Answer >>
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