A rollover is a tax-free transfer of assets from a retirement plan to either a traditional IRA or another employer's retirement plan. Rollovers generally come from 401(k) plans and other types of defined contribution plans. If a rollover is done properly and all rules are followed, there will be no taxes or penalties.
There are two possible ways that retirement funds can be rolled over: the 60-day rollover and the trustee-to-trustee transfer.
Generally, the term "rollover IRA" refers to an IRA that you establish to receive funds from an employer retirement plan like a 401(k). A rollover IRA is also sometimes referred to as a "conduit IRA."
There are many factors to consider when deciding whether to roll over a distribution from a 401(k), 403(b), or governmental
457(b) plan1, and where your rollover dollars should go if you decide to make a rollover.
Consult this helpful guide on how to Rollover to a new employer's plan, to an IRA, or complete an indirect rollover.
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