Series 65: Rollovers Vs. Transfers

Rollovers vs. Transfers

Sometimes qualified retirement plan participants may want to roll over or transfer the assets in their current plan to another qualified plan or to an IRA. Rollovers and transfers differ both procedurally and in their tax consequences.

A rollover is when the individual wants to take the retirement plan account funds to a new investment entity. This usually occurs when an employee leaves one job and takes his pension or accumulated account in one lump sum when he leaves. In other words, the employee takes a check for the entire amount with the intention of depositing it into a new plan. This is also called an indirect transfer. Rollovers are allowed no more than once in a 12 month period; meaning, from the day