Rollover IRA Rules
Knowing about the rollover IRA rulescan go a long way to helping you take control of your financial situation where your retirement is concerned. If you find that you want to change financial institutions while keeping your existing your current IRA, then rolling it to your new institution is your best option. So keep reading to learn more about rollover IRA rules and the steps you need to take to ensure the transition is as smooth as possible.
What a Rollover Is
When you rollover a retirement plan, you take something like an IRA or another sponsored plan like a 401kand roll it into an IRA. This usually happens because you change jobs, but there are other scenarios under which this happens as well. Whatever your reasoning is, rolling your plan over can give you some control over how your retirement funds are invested. With the number of options that are out there, it makes sense that you would want to do some exploration in order to produce results that are as strong as possible.
The Rollover IRA Rules to Know
Like anything else involving personal finance, there are certain rules that you should be aware of in order for the process to be as painless as possible. When you want to rollover your plan into an IRA, be aware of the following:
- You Have Two Main Options – You can go with a direct rollover. This is where you transfer money from one organization to another. You can also go with an indirect rollover, where money is given to you from your original plan in the form of a check. You then deposit that money into the new IRA.
- There May Be Taxes – If you do a direct rollover, you won’t have to worry about any taxes, but an indirect rollover could see you penalized with the appropriate taxes if the money is no deposited within a certain timeframe.
- Eligibility is Fairly Easy – In most cases, you are eligible for a rollover if you leave one job for another, but you can also roll over if you are 59 ½ years old. In some cases, there are special provisions within the plan itself that dictate eligibility.
- You Can Keep Contributing – Rollover IRA rules state that you can continue to contribute to your new plan, making it easier for the plan to grow to a respectable amount by the time you’re ready and able to withdraw the money.
These are the basics of rolling over an IRA and knowing these will help you get started if you want to move your money from one account to another. When decide that you want to take that step, I encourage you to do as much reading as possible. The IRS website has a wide range of information available that will help you make sense of the many financial rules surrounding IRAs and other types of retirement accounts. Learn as much as you can, and you will be able to make the most informed decisions possible where your money is concerned. Go Back To the Invest Your Money Now HOMEPAGE