Direct Transfer

AAA

DEFINITION of 'Direct Transfer'

A transfer of assets from one type of tax-deferred retirement plan or account to another. Direct transfers are not considered to be distributions and are therefore not taxable as income or subject to any penalties for early distribution. This type of transfer is now usually done electronically, without a check being cut from one custodian to another.

INVESTOPEDIA EXPLAINS 'Direct Transfer'

Direct transfers can be effected by the account or plan owner by filling out the requisite paperwork. Most transfers take several days to complete, although this process is now generally faster in the electronic and computer age than in the past. Direct rollovers from qualified plans are a form of direct transfer.

RELATED TERMS
  1. Qualified Retirement Plan

    A plan that meets requirements of the Internal Revenue Code and ...
  2. Individual Retirement Account - ...

    An investing tool used by individuals to earn and earmark funds ...
  3. Direct Rollover

    A distribution of eligible rollover assets from a qualified plan, ...
  4. Dividend Rate

    The total expected dividend payments from an investment, fund ...
  5. IRA Rollover

    A transfer of funds from a retirement account into a Traditional ...
  6. Current Service Benefit

    The amount of pension benefit accrued by an employee who had ...
RELATED FAQS
  1. If an employee covered by a SIMPLE leaves his employer within the two-year period ...

    During the first two years after the SIMPLE IRA is established, assets held in the SIMPLE must not be transferred or rolled ... Read Full Answer >>
  2. I am in the second year of taking SEPP distributions from my IRA. Can I transfer ...

    The most recent guidance issued by the IRS and the Treasury Department is Revenue Ruling 2002-62. There is some disagreement ... Read Full Answer >>
  3. Can I roll over my IRA assets to a sheltered Canadian plan?

    It does not appear that this is an option for you. The current version of the U.S. Code and the U.S./Canada Treaty do not ... Read Full Answer >>
  4. I am the beneficiary of an IRA and a Keogh. Can I combine them into one plan?

    It depends. If you are a "spouse beneficiary" for both the Keogh and the IRA, then you may transfer or roll over the inherited ... Read Full Answer >>
  5. What option strategies can I use to earn additional income when investing in the ...

    A risk-averse investor should build his retirement portfolio by putting together a well-diversified portfolio and then regularly ... Read Full Answer >>
  6. How do you mediate a dispute between primary and contingent beneficiaries of a trust?

    There may be a dispute between beneficiaries whenever the proceeds of a trust or other transfer on death (TOD) account are ... Read Full Answer >>
Related Articles
  1. Personal Finance

    Common IRA Rollover Mistakes

    Avoid paying excess taxes by learning some simple transfer rules.
  2. Retirement

    Transfer Retirement Savings When You Change Jobs

    Half of Americans lose their nest eggs when they switch careers. Learn why you should avoid this trap.
  3. Options & Futures

    Roth IRAs Tutorial

    This comprehensive guide goes through what a Roth IRA is and how to set one up, contribute to it and withdraw from it.
  4. Retirement

    Understanding Defined Benefit Pension Plans

    An employer-sponsored retirement plan where employee benefits are based on a formula using factors such as salary history and duration of employment.
  5. Professionals

    Help Parents Avoid This Retirement Savings Blunder

    Parents should make saving for their own retirement a priority over helping with their children’s college costs.
  6. Professionals

    Why Retirement Planning Differs for Women

    Women face unique challenges when it comes to saving for retirement compared to men. Here's why and how to better prepare.
  7. Mutual Funds & ETFs

    Top 7 ETFs Designed for Retirement Income

    These seven ETFs offer several advantages over traditional ETFs, especially for investors seeking retirement income.
  8. Investing

    Financial Gifts For Grads: Kindergarten To College

    If you really want to help your grad preparing for the future, consider a present that supports their long-term goals—an early start to financial planning.
  9. Retirement

    Find The Top Retirement Cities In South Korea

    South Korea's busy, modern capital, Seoul, has traffic signs in Korean writing only and English is not widely spoken. Check retirees' visa rules closely.
  10. Professionals

    5 Signs That You Have a Lousy 401(k) Plan

    Knowing whether a 401(k) plan is good or not so good is important. This will help participants decide how much to invest and when to demand improvements.

You May Also Like

Hot Definitions
  1. Covered Call

    An options strategy whereby an investor holds a long position in an asset and writes (sells) call options on that same asset ...
  2. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  3. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  4. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
Trading Center