IRA Rollover Rules: Know Your Options

Understanding IRA rollover rules can help you better plan for the future. When you are dealing with retirement funds, you want to make sure that you handle the situation correctly. Otherwise, you could lose some of your retirement to unnecessary fees along the way. Here are a few things to know about IRA rollovers.

New Custodian

You are free to rollover your IRA funds from one custodian to the other. If you are unsatisfied with your current IRA custodian or want to transfer for other reasons, you are free to do so. However, you can only rollover funds from a particular IRA once per year. You can have the transaction go directly from one custodian to the other or you can handle it yourself. If you handle the transfer, you have 60 days to move the money to the new account. If the money is not deposited into the new account within 60 days, you will have to pay a 10% penalty on the entire amount and pay income taxes on the money for that particular year. 

Roth Conversion

If you have a traditional IRA, you can also convert it to a Roth IRA. You will have to pay taxes on the money in your IRA and then file the necessary paperwork to convert to a Roth IRA. 

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