How do IRA rollover distributions work?

There are a few different types of rollovers, per IRS rules.

Direct rollover

If you’re getting a distribution from a retirement plan, you can ask your plan administrator to make the payment directly to another retirement plan or to an IRA. Contact your plan administrator for instructions. The administrator may issue your distribution in the form of a check made payable to your new account. No taxes will be withheld from your transfer amount.

Trustee-to-trustee transfer

If you’re getting a distribution from an IRA, you can ask the financial institution holding your IRA to make the payment directly from your IRA to another IRA or to a retirement plan. No taxes will be withheld from your transfer amount.

60-day rollover

If a distribution from an IRA or a retirement plan is paid directly to you, you can deposit all or a portion of it into an IRA or a retirement plan within 60 days. Taxes will be withheld from a distribution from a retirement plan, so you’ll have to use other funds to roll over the full amount of the distribution.

Source: IRS website (IRS.gov) March, 2018

For Educational Purposes Only.

Information about IRA rollovers is intended to be educational only. It is not tailored to the investment needs of any specific investor.  This information should not be considered tax or legal advice.

IRA rollovers are subject to complex tax laws and regulations which are subject to change and which can materially affect investment results. Westwood cannot guarantee that this information is accurate, complete, or timely. Westwood makes no warranties regarding this information or results obtained by using it. Westwood disclaims any liability arising out of the use of, or any tax position taken in reliance on, this information. Be sure to consider all your available options and the applicable fees and features of each before moving your retirement assets.

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