What is the difference between a transfer and a rollover?
Both transfers and rollovers are ways to move funds from one retirement account to another. • With a transfer, funds are moved directly from one IRA (or other type of retirement plan) into another by the financial institution(s) where the accounts are held. Because you, the customer, never handle the funds, the transaction is not considered a distribution. There are no limits to the number of transfers you can make. • With a rollover, funds from one IRA (or other type of retirement plan) are distributed to you. It is then up to you to deposit the funds into another IRA or other retirement plan within 60 days in order to avoid tax consequences. Assets in the Rollover IRA are not counted toward your annual IRA contribution limits. Only one rollover for a single account is permitted per 12 month period. To roll over or transfer IRA funds, please initiate your request online. For further information, please call Customer Service at 1-800-347-7000 (TDD 1-800-347-7454), 24 hours a day, 7 day
A Transfer occurs when money is moved directly from one IRA Custodian to another without distribution to the IRA accountholder. No tax forms are generated by the sending custodian or by the receiving custodian. In a transfer, checks from the sending custodian will be made payable to the new custodian. A Rollover occurs when an individual receives a distribution from an eligible retirement plan and makes a contribution to an IRA (or company sponsored retirement plan) within sixty days of receiving the distribution. The individual may roll over all or any part of the actual amount received and, if the distribution was from an employer sponsored retirement plan or 403(a) or (b) annuity (thus subject to the 20% federal income tax withholding), he/she may roll over up to 100% of the distribution by making up the 20% difference that was previously withheld.
Related Questions
- Can I transfer/rollover funds from an existing IRA, 401(k), 403(b), SEP IRA, Roth IRA, Keogh, to a Self-Directed IRA for the purpose of investing in real estate?
- What is the difference between an IRA-to-IRA rollover and an IRA-to-IRA transfer?
- How long does it take to transfer an IRA or rollover a 401(k)?
