Rollover IRA

When you leave a job either to change jobs or retire, you have choices to make regarding your retirement account. You may choose to rollover the funds you have worked hard saving into a Rollover IRA. A Rollover IRA is an IRA that is used to hold assets that have been distributed from an employer's retirement plan, such as a 401(k) or Profit Sharing Plan. By rolling over your retirement account from your employer, you have more flexibility and greater investment choices.

There is no limit on the amount of money you can rollover.  This type of an IRA can be kept segregated from your Traditional IRA contributions to allow you to possibly roll it back into another employer plan.  If you are near the end of your working career, rollover contributions can be co-mingled with Traditional IRA contributions.*

Benefits

  • Ensures the tax-deferred status of your retirement plan(s)
  • Preserves your right to roll over your savings into another employer-sponsored retirement plan at a later date if you choose
  • Can consolidate retirement investments into one account
  • A direct rollover helps you avoid 20% tax withholding on your distribution

Considerations

  • IRA assets cannot be borrowed
  • Annual IRA fees may be applicable
  • All rollovers must be completed within 60 days
  • You may only rollover your assets once in a 12 month period after your initial rollover is completed

Details

Eligibility
  • Anyone with a qualified distribution from an employer-sponsored plan
Income Limits
  • No Limits
Annual Contribution Limits1
  • $5,000 under age 50
  • $1,000 additional catch-up contribution if age 50 and over
  • You may also rollover most employer-sponsored retirement assets or other eligible IRA assets at any time with no annual limit
Tax Considerations
(See your tax advisor)
  • No taxes are due at rollover if completed within 60 days of receiving withdrawal from employer-sponsored plan; however, 20% withholding will apply unless a direct rollover to your Rollover IRA is requested with your employer
Types of Investments
  • Stocks, bonds, mutual funds, exchange-traded funds (ETFs), U.S. Treasuries, Brokered CDs, unit investment trusts (UITs) and annuities
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Disclosures:

  • Check with your Financial Advisor and Tax Advisor for the appropriate strategy for you.
  1. Limits apply for 2008 and are subject to change in the future. You may contribute simultaneously to a Traditional IRA and a Roth IRA (subject to eligibility) as long as the total contributed to all (Traditional and Roth IRAs) does not exceed described limits.
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