When it comes to retirement accounts there are several different types of rollovers and transfers. An IRA rollover is one of the options that you may have if you have to move your retirement money from one account to another or “roll it over”. The Financial Guys of Buffalo, New York are dedicated to finding the right solution for you if you have an IRA or other retirement account that you need to move or rollover.
What’s the difference between a rollover and a transfer?
IRA rollover and transfers are often confused so let’s take a closer look at them both to determine the differences. When you think about an IRA rollover, you may actually be thinking about a transfer. A transfer occurs when the bank that has your IRA or other type of retirement account directly sends the funds to the new bank holding your IRA account. The funds are simply transferred from one bank to another and the process is usually pretty simple. If the current holder of your IRA or retirement account sends you the check and then you “rollover” the funds into the new account, 20% is withheld. The Financial Guys will help make sure that you’re having the accounts transferred the right way so that you’re not subject to penalties.
What type of accounts can be rolled into an IRA?
Accounts that can be rolled into an IRA account include another IRA, 401(k) accounts and 403(b) accounts. There is typically a limitation on how many transfers or rollovers you can do within a year. You may also be able to roll over your retirement account into a Roth IRA depending on your income level.
When would I need to do this?
People often choose to use an IRA rollover when they either retire or leave their place of employment. Not every employer offers retirement savings plans and therefore you’d need a new place to put the money that’s going to give you tax benefits in the event of a separation with your employer. If you retire from your employer, an IRA is a great way to continue to save until you’re ready to start withdrawing on the funds.
What about penalties?
The Financial Guys will look at your individual situation to see what penalties (if any) will apply to you. As previously mentioned, if you’re transferring an IRA or other type of retirement account directly into the new IRA from bank to bank, penalties can often be avoided. It’s always best to talk to experienced rollover professionals in order to make sure you’re going to receive the most benefits out of transferring any retirement accounts that you have.
The Financial Guys are located in western New York and we look forward to helping you with your retirement needs.