IRAs: Frequently Asked Questions


 

Table of Contents

  • When should I use a rollover to my IRA?
  • Is there a downside to an IRA rollover?

When should I use a rollover to my IRA?

That depends on your particular needs and circumstances. Here are some reasons you might want to roll over distributions to your IRA:

  1. You want to, or have to, take a distribution from your employer’s plan and want these funds to continue to grow tax-free in your own IRA.

  2. As a self-employed, you are terminating your Keogh plan or retiring from business and want to continue the tax shelter for these distributions.

  3. You are the beneficiary of a deceased person’s retirement plan and want to continue the tax shelter for these distributions in your own IRA.
Is there a downside to an IRA rollover?

Here are some of the disadvantages of an IRA rollover:

  1. Rollovers from company or Keogh plans may take away your spouse’s right to share in plan assets.

  2. IRAs can’t claim the limited tax relief allowed on lump-sum distributions.

Tip: To avoid tax hassles, rollovers should be done between the trustees of the plans involved. In other words, the check should not be made out to you personally, but to the trustee of the rollover account.

Also See…

Investment Basics: What You Should Know
Investment Options: Frequently Asked Questions
Asset Allocation: How To Diversify For Maximum Return
Buying On Margin: How It Works and What To Watch Out For
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Investment Clubs: What You Need To Know
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Investing In Mutual Funds: The Time-Tested Guidelines
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Mutual Funds: Frequently Asked Questions
Stocks: Frequently Asked Questions
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Penny Stocks: How To Investigate Them and Avoid the Traps
Annuities: How They Work and When You Should Use Them
Annuities: Frequently Asked Questions
10 Retirement Saving Tips
Your Retirement Plan: How To Get Started
Retirement Assets: Frequently Asked Questions
Developing a Financial Plan: Frequently Asked Questions
Traditional vs Roth IRAs: Frequently Asked Questions
Roth IRAs: How They Work and How To Use Them
How Much Will I Need To Save For Retirement?
How Much Can I Contribute To An IRA?
Should I Convert To A Roth IRA?
What Is My Projected Required Minimum Distribution?
How Do Taxes and Inflation Impact My Investment Return?
When Should I Begin Saving For Retirement?
Becoming A Millionaire

Thomas K. Varghese CPA
1700 S Morgan Rd Suite D-1
Oklahoma City, OK, 73128
Phone: (405)261-6350
Email: thomas@tvarghesecpa.com