Rollover IRA

Contributing to a retirement plan, whether it is a 401k, 403b, a mutual fund, a stock portfolio, or an other type of retirement plan can help you to realize your long term dreams and goals. But, when switching from one employer to another, keeping track of the funds that you have invested in your 401k retirement account can be a little difficult, which is where the rollover IRA can be a very handy investment tool to know about.

When you have a rollover IRA you can move the money that you have invested for retirement from one qualified retirement plan, like a 401k and put it into an IRA. If you choose to take advantage of a rollover IRA, you will continue to have the benefit of your investment being tax-deferred and you will avoid fees and penalties that come with early payout. A rollover IRA is very similar to a traditional IRA in that they are both subject to the same general rules.

The contributions and earnings from a rollover IRA as well as a traditional IRA are taxed if any of the funds are withdrawn after the age of 59. Any withdraws that are made before the age of 59 are taxable and can be subject to a penalty fee of ten percent. With both types of IRAs, any funds that are withdrawn after the age of 70 are not subject to any penalties or fees. As with any other type of retirement plan or investment strategy, careful research and planning should go into any decision that you make.

Contributing National Payday Staff Writer

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