Automatic Rollover

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Dictionary Says

Definition of 'Automatic Rollover'

1. The transfer of qualified retirement plan distributions into an individual retirement account with no action required by the account holder.

2. The reinvestment of a certificate of deposit's interest and principle upon maturity with no action required by the account holder. When a CD matures, the certificate holder may have a short window during which to move the proceeds to another account. If they do nothing, the financial institution automatically reinvests the proceeds into a new CD with the same maturity as the original CD.

Investopedia Says

Investopedia explains 'Automatic Rollover'

1. Internal Revenue Service regulations enacted in 2001 as part of the Economic Growth and Tax Relief Reconciliation Act require plan sponsors of most qualified defined contribution and defined benefit plans, section 457 plans and 403(b) plans with an automatic cash-out provision to automatically place certain mandatory distributions into an IRA. If the plan holder wants something different to happen, they can choose a cash distribution or a rollover to a specific retirement account. The regulations became effective in 2005 and apply to mandatory distributions of more than $1,000 that are eligible for rollover and subject to federal income tax withholding.

2. Automatic rollover, also called "automatic renewal," can simplify the reinvestment process for CD holders. The drawbacks are that the CD holder might prefer to put the money into a different investment, and if they do not act during the short time before the automatic rollover kicks in, there will be a penalty to cash out the new CD early.
Search results for

'Automatic Rollover'

  • Business Owners: Rules For Qualified Retirement Plans

    http://www.investopedia.com/articles/retirement/05/042505.asp
    ... Option No.1: The Automatic Rollover The following are a few of the requirements
    that apply should you choose the automatic rollover option. ...

  • Exceptions To The 60-Day Retirement Account Rollover Rule

    http://www.investopedia.com/articles/retirement/05/041105.asp
    ... other than those described under this article's section "Automatic Waiver for Hardship"
    above. Whether the inability to complete the rollover was the result of ...

  • Thrift Savings Plan Helps Federal Workers Retire

    http://www.investopedia.com/articles/retirement/08/thrift-savings-plan.asp
    ... the service requirements that entitle you to keep the automatic 1% contributions ...
    Rollover Contributions From Another Retirement Plan The TSP can accept funds ...

  • The Pension Bill: A Wolf In Sheep's Clothing

    http://www.investopedia.com/articles/retirement/06/pensionbill2006.asp
    ... its employees. The same goes for the Roth IRA rollover provision and the
    automatic redirection of refunds from the IRS. Both your ...

  • Tax Relief For Katrina Victims

    http://www.investopedia.com/articles/retirement/05/KETRA.asp
    ... Automatic Three-Year Extension of the 60-Day Rollover Period Amounts that are withdrawn
    from a retirement plan and are rollover eligible can be rolled over to ...

  • A Closer Look At The Roth 401(k)

    http://www.investopedia.com/articles/retirement/06/MoreOnRoth401k.asp
    ... The requirements for such automatic enrollments are explained in detail in ... k) account
    are Roth 401(k) deferral contributions and rollover contributions from ...

  • Asset Distributions A Key Consideration For Retirees

    http://www.investopedia.com/articles/retirement/08/qualified-plan-distributions.asp
    ... a lump-sum distribution; a series of periodic payments; a rollover into another ... The
    first option - which is automatic - is the qualified joint and survivor ...

  • Did Your Roth IRA Conversion Pass or Fail?

    http://www.investopedia.com/articles/retirement/03/082703.asp
    ... from his or her non-Roth retirement account and making a rollover contribution of ...
    or her tax return by April 15, he or she is granted an automatic six-month ...

  • The 4-1-1 on 403(b) Plans

    http://www.investopedia.com/articles/retirement/10/403b-plans.asp
    ... Recent legislation has also allowed employers to institute automatic 403(b) plan
    contributions for all employees, although they may opt out of this at their ...

  • Strategic Ways To Distribute Your RMD

    http://www.investopedia.com/articles/retirement/05/StrategicRMDs.asp
    ... for multiple IRAs from one of the IRAs, be sure to notify the other IRA custodians
    in writing, especially those that process automatic distributions that do ...

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