What is an indirect rollover?
An indirect rollover enables you to directly receive the assets from your employer- sponsored plan and, at your discretion, to roll over either all or a portion of the assets into another eligible retirement plan within 60 days of receiving the distribution. Please note that your employer may be required to deduct a 20% required withholding income tax. However, you can recover the deducted amount by making sure that you roll over the amount you received from your prior employer, plus the amount that was deducted. By funding your new retirement plan with 100% of your payout, you will receive the refund in the form of a tax credit when you file your tax return. Schwab recommends that you check with your tax advisor to determine the best solution for your individual situation.
