Do You Know About The Ira Rollover Frequency Rule?

If you’re concerned about the IRA rollover frequency, you may need a little more information, as well. One gentleman that I know of, thinking that he understood all about a rollover into IRA incurred heavy tax penalties. Here’s how to avoid making the same mistake.

First of all, the IRA rollover frequency does not apply to “transfers”. You might think that transfers and rollovers are the same thing. If so, you’re not alone. Many custodial companies use the terms interchangeably and that causes a great deal of confusion among account holders.


I’m not sure if the use of the terms is meant to confuse or if the custodians assume that their clients know the difference. But, either way, it is important to note that transferring the fund directly from one custodian to another is a safer transaction for many reasons. This is just one.

When converting a rollover into IRA funds, a check is mailed directly to you and the transaction is reported to the IRS. Transfers are not reported and you don’t have to worry about when or if the check will arrive in the mail. So, I always recommend a transfer, rather than a rollover into IRA.

Currently the maximum allowed IRA rollover frequency is once during a 12 month period. You could transfer the fund as often as you liked, without incurring taxes. Although, it is wise to check out the custodial company that you are considering, before you make the transfer, simply, because the custodian could charge an early withdrawal penalty or something similar.

If you feel that now is the time to make a change, you might be unhappy with the returns that you are currently seeing on your investments. If that is the case, then you may want to consider a rollover into IRA of the self-directed type.

Most custodial companies offer some choices, but with a truly self-directed account, your investment choices are only limited by the applicable tax laws. There are many investment types that are allowed and can be highly profitable. Many people think they are limited to stock or money market funds. Again, that confusion is caused by the custodial companies.

For example, most custodians do not allow their clients to invest in real estate, unless the real estate is held by a company and the retirement account simply owns stock in the company. This just complicates the whole process.

If you adhere to the IRA rollover frequency and you choose the right self-directed custodian, your account can hold title to land, houses or any other type of real property, as long as you don’t live in it or plan to in the future. This could allow your account to earn regular rental incomes or make a quick profit. It’s all up to you.

When you make a rollover into IRA, you usually have a large amount of un-invested cash. So, that’s the time to think about investing in something other than the stock market. As long as you abide by the IRA rollover frequency limitations, you’ll be okay. Just take the time to learn a little more, before you begin. If you have a few minutes to spare, please feel free to browse through my website.

By: Gordi

Article Directory: http://www.articledashboard.com

Gordon Hall is an active participant of a national network of professional writers, who advocate socially conscious real estate investing, through the use of retirement vehicles such as IRAs, 401Ks and other retirement assets. For more information, or to get involved, please visit the following www.double-your-ira.com