1st Book Surgery Articles

Rolling your IRA funds from one financial institution to another is an important process. When you make that decision, there are certain considerations that need to be made to avoid making costly mistakes.

1. The One Year Rule. When you rollover your IRA into another one, you cannot rollover funds from that IRA into another account for one year. Certain exceptions are made, but generally speaking, this is the case.

2. The 60-Day Rule. When you receive funds from your Traditional IRA to rollover into another account, you have sixty days to complete the process. If you do not do this, you will pay taxes on those funds to the IRS. To avoid paying these taxes, move those funds as quickly as possible into the new IRA.

3. Unnecessary Rollovers. If you don’t need to use the funds in the meantime, and just want to move the IRA to a different institution, consider doing an IRA transfer, rather than an IRA rollover. If you live in Sonoma, and you want to move your IRA to an institution in Sacramento, simply because you feel it is a better plan, then you can transfer the money. With transfers, you do not have to report it, there are fewer limitations, and thus there are not as many errors.

These are just a few things to consider when executing an IRA rollover. Talk with your financial institution or a financial planner about other considerations