IRA Rollover


DEFINITION of 'IRA Rollover'

A transfer of funds from a retirement account into a Traditional IRA or a Roth IRA. This can occur either through a direct transfer or by a check, which the custodian of the distributing account writes to the account holder who then deposits it into another IRA account.


If the transfer is done by check, there will be a 20% withholding penalty applied before the custodian issues the check. To avoid the 20% penalty, the rollover must take place directly from one custodian to another.

Many IRAs will only allow one rollover per year on an IRA to IRA transfer. The one-year calendar runs from the time the distribution is made. Most rollovers occur when people change jobs and wish to move 401(k) or 403(b) assets into an IRA. Most IRAs offer more investment choices along with a continuation of tax-free gains and income.

IRA rollovers can occur from a retirement account such as a 401(k) into an IRA, or as an IRA to IRA transfer. A rollover can occur into a Roth IRA provided that the individual's adjusted gross income is below a certain level in the tax year in which the rollover occurs.

  1. IRA Transfer

    The transfer of funds from an Individual Retirement Account (IRA) ...
  2. Direct Transfer

    A transfer of assets from one type of tax-deferred retirement ...
  3. Roth IRA

    An individual retirement plan that bears many similarities to ...
  4. Direct Rollover

    A distribution of eligible rollover assets from a qualified plan, ...
  5. Spousal IRA

    A type of individual retirement account that allows a working ...
  6. Conduit IRA

    A traditional IRA that holds only assets that were distributed ...
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