IRA Rollover

An IRA rollover is a transfer of assets from one IRA to another. This can be done for a variety of reasons, such as changing jobs, retiring, or simply wanting to consolidate your IRAs.

There are two types of IRA rollovers: direct rollovers and indirect rollovers.

A direct rollover is when the funds are transferred directly from the old IRA to the new IRA. This is the simplest and most efficient type of rollover.

An indirect rollover is when the funds are first withdrawn from the old IRA and then deposited into the new IRA within 60 days. This type of rollover is more complex and there are more rules and regulations that apply.

There are a few things to keep in mind when doing an IRA rollover. First, you will need to make sure that the new IRA is eligible to receive rollovers. Not all IRAs are eligible, so you will need to check with the custodian of the new IRA before you start the rollover process.

Second, you will need to make sure that you complete the rollover within 60 days of the withdrawal from the old IRA. If you do not, the funds will be considered a taxable distribution and you will have to pay income taxes on them, as well as a 10% early withdrawal penalty if you are under age 59 1/2.

Third, you will need to keep track of the basis of the transferred funds. This is the amount of money that you originally contributed to the old IRA. The basis is important because it will determine how much of the distribution from the new IRA is taxable.

If you have any questions about IRA rollovers, you should consult with a financial advisor.