Why is it important to directly roll money distributed from a Retirement Plan account to a IRA?
By directly rolling over money from your Retirement Plan into a IRA, you preserve the tax-deferred status of your retirement money. If you were to take your retirement savings directly from the Retirement Plan as a lump sum distribution you would be subject to a mandatory 20% withholding and the money distributed from your Retirement Plan savings would be considered taxable income and penalties may apply if you are under 59 ½ .
