Rollover IRA
Rollover IRA
A Rollover Individual Retirement Account (IRA) is a type of retirement savings account that allows you to move funds from a previous employer-sponsored retirement plan, like a 401(k) or 403(b), into an IRA.
The primary purpose of a Rollover IRA is to maintain the tax-deferred status of the retirement assets. By moving the funds directly into a Rollover IRA, and not taking possession of the funds directly, you avoid immediate taxation and potential early withdrawal penalties.
The funds in a Rollover IRA can then be invested, often with a greater range of options compared to employer-sponsored plans. The types of investments available will depend on the financial institution that serves as the IRA custodian.
It's important to note that there are specific rules and timelines for conducting a rollover to avoid any potential tax consequences. It's always a good idea to consult with a tax or financial advisor when considering a rollover.
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