Laid Off in San Diego

 Under current law, Qualified Retirement Plan (QRP) Participants are able to roll over taxable distributions from qualified plans and IRAs to 403(b) and government 457 plans, in addition to other qualified plans and IRAs. But be sure you look before you leap, these plans are not be required to accept rollovers. QRP Participants are also be able to rollover distributions of after-tax employee contributions from qualified plans or an IRA to a defined contribution plan or IRA. A rollover of after-tax amounts to a defined contribution plan must be transmitted through a trustee-to-trustee transfer. The accepting plan must separately account for the after-tax amounts.

Spouses who who have been widowed and participate in a 403(b), government 457 or qualified plan may roll over distributions from their deceased spouse’s plan into their own plan, provided the accepting plan includes a rollover provision. And with IRS approval, the 60-day period in which to make a rollover can be extended if not doing so would be against “equity or good conscience,” as stated by the law. Examples of instances when the waiver of the 60-day period will be considered appropriate include matters outside the control of the individual, such as a natural disaster, hospitalization or a failure of a financial institution to process the rollover in a timely manner (and this does happen, just ask me).

Below is a chart indicating what can be rolled over into what. 

(more…)

IRA Rollovers
_______________________________________________________________________________________________________
Frequently Asked Questions

What is an IRA Rollover?
An IRA Rollover is a tax-free transfer of funds from a tax-deferred plan, such as a 401(k) plan, Thrift Savings Plan, Defined Benefit Plan, 403(b) Plan, etc., to a traditional IRA. An IRA Rollover can be done when an employee changes jobs, is laid off or retires and is entitled to a distribution from the old employer’s 401(k) plan or other Qualified Retirement Plan. By doing an IRA Rollover, the funds can be transferred tax-free to the employee’s own IRA. This means the funds can continue to grow on a tax-deferred basis inside the IRA. It also means that the funds are under the complete control of the employee with respect to investment decisions and future distributions.

The term “IRA Rollover” can also be applied to a transfer of funds from one IRA to another IRA. This too can be done on tax-free basis under a different set of rules that apply to IRA-to-IRA rollovers. Those rules are covered separately. (more…)