Simply defined, Rollover IRA means moving money you've contributed from a plan such as a 401(k) into an IRA. If you are eligible to receive a monetary payout from a retirement plan sponsored by your employer, a rollover IRA could be very advantageous.

Here is a list of common questions and answers about Rollover IRAs:

1. How do I make a contribution to a Rollover IRA?
A Rollover IRA is typically seeded by the eligible monetary distributions from a retirement plan sponsored by your company. If you decided to create a separate IRA for your rollover, you can easily move these distributions to another employer-sponsored plan in the future assuming your company allows this. It's probably a good idea to keep your Rollover IRA completely separate from any other IRA's you might have with your employer because once you make contributions to a Rollover IRA that are not from a retirement plan sponsored by your company, you forfeit the right to move your Rollover IRA to one that is sponsored by your company.

2. What do I need to know about my distributions from a Rollover IRA?
The good thing is: distribution rules for a Rollover IRA are the very same as the rules for a Traditional IRA. Contributions and earnings are not taxed assuming you don't withdraw them before age 59 1/2. Withdrawals before the age 59 1/2 are very much taxable and subject to a 10% penalty, with certain exceptions of course.

3. What is a Direct Rollover?
A Direct Rollover is the situation where your employer directly rolls over your retirement plan payout into a Rollover IRA which allows you to avoid the 20% IRS withholding tax.

4. I am about to move jobs, what are best next steps if I move jobs and want to do a Rollover IRA?

• 1.Open a Rollover IRA account with the investment firm your new company works with.


• 2.Contact your former employer to notify them of your intent to rollover funds to your new Rollover IRA.


• 3.Complete any distribution forms required by your old employer. Be sure to ask your former employer for appropriate contact person who knows about benefits in case you have follow-up questions.


• 4.Confirm when your former employer will distribute the funds to your new account (keep in mind this varies according to each plan's requirements).

Getting your head around various Rollover IRA options can be difficult at best, www.retireology.com is here to help answer some of the important questions and give you relevant info about Rollover IRAs!