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. Adjusted Gross Income - AGI

    A measure of income calculated from your gross income and used ...
  2. IRA Transfer

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

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

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

    A distribution of eligible rollover assets from a qualified plan, ...
  6. Conduit IRA

    A traditional IRA that holds only assets that were distributed ...
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  1. How can you borrow from a Roth IRA?

    Technically, you can’t borrow money from a Roth IRA, at least not like you would from a traditional loan, but there are other ... Read Full Answer >>
  2. I want to close my IRA account. What percentage will I lose to tax?

    You can move the amount by means of a trustee-to-trustee transfer to another IRA, or roll over the amount to your 401(k). ... Read Full Answer >>
  3. I have several CDs in my IRA with different maturities. Can I roll them over to another ...

    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 Full Answer >>
  4. 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 Full Answer >>
  5. Are catch-up contributions included in the 415 limit?

    Unlike regular employee deferrals, catch-up contributions are not included in the 415 limit. While there is an annual limit ... Read Full Answer >>
  6. Can catch-up contributions be matched?

    Depending on the terms of your plan, catch-up contributions you make to 401(k)s or other qualified retirement savings plans ... Read Full Answer >>

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