Rollover IRA FAQs
A transfer of assets is when you instruct your retirement account provider move funds directly between two accounts of the same type, such as from one Traditional IRA to another Traditional IRA. Transfers can take place as often as you like. They are not reported to the IRS because you never take possession of your money.
Plans that may not be eligible include employee stock ownership plans (ESOPs) and defined benefit plans.
You may be allowed to roll over after-tax dollars and governmental 457(b) qualifying distributions. Contact your plan administrator(s) to find out if your particular plan is eligible for rollover.
With an indirect rollover, you do receive the assets from your employer-sponsored plan, and roll over either all or a portion of the assets into another eligible plan within 60 days of receiving the distribution. Your employer may be required to withhold 20% for federal income tax. However, you can recover the deduction if you roll over the amount you received from your prior employer plus the 20% that was deducted. You will receive the refund in the form of a tax credit when you file your tax return.
Your plan administrator may have withheld 20% for federal income tax. You can recover the deduction if you roll over the amount you received from your prior employer plus the 20% that was deducted.
Please see IRS Publication 590 or talk with your tax advisor for more details.
A rollover of retirement plan assets to an IRA is not your only option. Carefully consider all of your available options which may include but not be limited to keeping your assets in your former employer's plan; rolling over assets to a new employer's plan; or taking a cash distribution (taxes and possible withdrawal penalties may apply). Prior to a decision, be sure to understand the benefits and limitations of your available options and consider factors such as differences in investment related expenses, plan or account fees, available investment options, distribution options, legal and creditor protections, the availability of loan provisions, tax treatment, and other concerns specific to your individual circumstances.
1. See the Charles Schwab Pricing Guide for Individual Investors ("the Guide") and any amendments to the Guide for comprehensive details on fees.
This tax information is not intended to be a substitute for specific individualized tax, legal, or investment planning advice. Where specific advice is necessary or appropriate, Schwab recommends that you consult with a qualified tax advisor, CPA, financial planner, or investment manager.