In short
A rollover moves retirement savings from one plan or account to another without tax. A direct (trustee-to-trustee) rollover avoids withholding; an indirect rollover must be completed within 60 days.
Key takeaways
- Distributions from employer plans paid to the employee have 20% withheld, which must be made up to roll over the full amount.
- Only one indirect rollover between individual retirement accounts is allowed in any 12-month period.
- Required minimum distributions can't be rolled over.
Where it's tested
TCP: Retirement Planning Strategies — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A distribution from a qualified plan that the participant intends to roll over is best handled by: