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How often can I rollover my IRA from one IRA into another IRA?

 

Why can't I rollover my IRA as often as I want?  Is there a waiting period between IRA rollovers? 

So you rolled your IRA over to one brokerage firm and for some reason you decided that you wanted to turn around and change to another firm – no big deal, right? Wrong!

Since it is your money you can move it whenever you like, right?  Wrong.  

Perhaps you were convinced, to transfer your IRA to a new firm, by a licensed financial advisor who was eager to get your business and he set up a rollover for you – that means that everything was done correctly, right?  Not necessarily.

Regardless of whether you have decided that you can get a better deal somewhere else, you cannot buy the types of investments that you wish to at the firm that you have moved to or if you fell for the slick words of a so-called experienced financial advisor who was either not looking out for your best interest or who was not aware of the most basic rules regarding IRAs; you must follow the IRS rules whenever you are dealing with IRAs.

Simply put, you may only rollover an IRA to another IRA one time during a twelve month period.1 The twelve month waiting period begins on the date that you receive the IRA distribution (not on the date that you actually roll it over into an IRA).2

You may make a tax free withdrawal of all or part of the assets in your current IRA so long as you either reinvest these assets into the same IRA or roll them over to a new IRA within a 60 day period.3

To learn more about the waiting period between rollovers along with examples4 please review the IRS information included below, visit the official IRS website and always be sure to speak with your own tax advisor prior to making tax related decisions.

 

Learn More About Rollover IRAs

 

Please note: the following footnotes include information from the official IRS website. To learn more please visit www.irs.gov or give us a call today at 1-800-50-PLACE.

 

Exception: 

There is an exception to the rule that amounts rolled over tax free into an IRA cannot be rolled over tax free again within the 1-year period beginning on the date of the original distribution. The exception applies to a distribution that meets all three of the following requirements.

  1. It is made from a failed financial institution by the Federal Deposit Insurance Corporation (FDIC) as receiver for the institution.
  2. It was not initiated by either the custodial institution or the depositor.
  3. It was made because:
    1. The custodial institution is insolvent, and
    2. The receiver is unable to find a buyer for the institution. 

Waiting period between rollovers:   

Generally, if you make a tax-free rollover of any part of a distribution from a traditional IRA, you cannot, within a 1-year period, make a tax-free rollover of any later distribution from that same IRA. You also cannot make a tax-free rollover of any amount distributed, within the same 1-year period, from the IRA into which you made the tax-free rollover.

  The 1-year period begins on the date you receive the IRA distribution, not on the date you roll it over into an IRA.

3 Rollovers are not deductible when reinvested:

Because this is a rollover, you cannot deduct the amount that you reinvest in an IRA.

Example of Rollover Waiting Period Rules:

You have two traditional IRAs, IRA-1 and IRA-2. You make a tax-free rollover of a distribution from IRA-1 into a new traditional IRA (IRA-3). You cannot, within 1 year of the distribution from IRA-1, make a tax-free rollover of any distribution from either IRA-1 or IRA-3 into another traditional IRA.

However, the rollover from IRA-1 into IRA-3 does not prevent you from making a tax-free rollover from IRA-2 into any other traditional IRA. This is because you have not, within the last year, rolled over, tax free, any distribution from IRA-2 or made a tax-free rollover into IRA-2.

Please view IRS Publication 590, Individual Retirement Arrangements (IRAs) for complete details.

 

Learn More About Rollover IRAs

 

Whether you are rolling over a 401(k) from an old job or a Traditional or Roth IRA from another firm; our rollover specialists are ready to help streamline the process and make it as easy as possible for you.

Give us a call today at 1-800-50-PLACE and we will help you to review your retirement account roll over options and if you would prefer we will help you with the paperwork!

Call us today at 1-800-50-PLACE (1-800-507-5223, 919-719-7200) for more information! 


 (Please be sure to check with your tax and/or legal advisor prior to making any contributions, withdrawals or other changes to your retirement account.  Place Trade Financial, Inc. does not offer tax or legal advice.  Information provided by Place Trade is for educational purposes and should not be considered as tax or legal advice under any circumstances.)     

  

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