What to know about IRA rollovers

What is a rollover IRA?

An IRA rollover occurs when you transfer money from employer-sponsored retirement plans into a traditional or Roth IRA. In a rollover, you’re keeping your money tax-deferred until you choose to withdraw it. The rollover option might also give you more investment freedom – options that may not have been available under your employer-sponsored plan. You can also use it to consolidate multiple accounts which may help you manage them more easily.

Keep in mind that your IRA may be subject to market risks, including possible loss of principal.

Three common reasons to rollover are:

• You get a new job
• Your employer stops offering a retirement plan
• You retire

Keep in mind that there are some IRA rollover rules:

• You can’t take a loan from your IRA
• With a traditional IRA, you must begin minimum distributions at age 72
• You may lose protection from creditors

Rollover considerations

There are some very good reasons to consider rolling money over into an IRA:

• Preserve retirement savings by avoiding taxes and the additional 10% early withdrawal tax
• Consolidate and simplify your retirement savings into one account
• You can rollover as many accounts as you have – no limits
• Choose from a broad range of investments

Setting up an IRA rollover

Rolling over an IRA can be quick and easy. An investment professional can help. Talk with your advisor to:

• Determine if an IRA fits in your investment portfolio
• Discuss your retirement and long-term financial goals
• Review your financial statements to understand your situation