Once-Per-Year IRA Rollover Scenarios

What’s Ok and What’s NOT Ok  with an IRA Rollover

IRA Rollover - ok or not okThe once-per-year IRA rollover rule sounds easy to understand. You may only do one IRA-to-IRA (or Roth IRA-to-Roth IRA rollover) per year (365 days). However, there are many ways it can go wrong. Consider the following two scenarios. One involves multiple distributions and the other involves multiple rollover deposits. One is ok and the other is not.

One Distribution and Multiple Rollover Deposits – That’s Ok!

If you take one distribution from your IRA, you may split the funds and roll them over to multiple IRAs. The rollovers could be done on different days and that would not be a problem. This works for purposes of the once-per-year rollover rule because only one distribution is received even though there is more than one rollover deposit.

Example: Sophie receives a $100,000 distribution from her IRA on June 15. On June 20, Sophie rolls over $75,000 to her IRA. On June 25, she decides to roll over the remaining $25,000 to another IRA. This is not a violation of the once-per year rollover rule because Sophie received only one distribution even though she did two rollovers on two different dates.

Continue Reading >>>

Six Options for Retirement Plan Funds

Retirement plan fundsKnow all options available for your company retirement plan funds.

Accepting a new job or transitioning into retirement can be both exciting and overwhelming. Figuring out how to handle your current employer’s retirement plan funds may not be at the top of your priority list, but with several options to consider, it’s crucial that you take the time to think through your next financial move.

6 Options for a distribution from a company plan

  1. Rollover to an IRA
  2. Convert to a Roth IRA
  3. Direct Transfer to an Inherited IRA or Inherited Roth IRA (Only for employer plan beneficiaries)
  4. Lump sum distribution
  5. Leave it in the current plan
  6. Convert from plan assets to a plan Roth account (in-plan Roth conversion)

Continue reading