IRA Rollover

Go through the individual IRA Rollover process with Best Life Insurance agents. When you decide that it is time to rollover your individual IRA account to another account, you should go through the process with one of the best insurance agencies in the business.

You can start an IRA Rollover because you got another job and want to move an old account to the new one. Or maybe you have multiple IRA accounts and are ready to bring them all together so you can be contributing to just one account. Either way, you can rollover these accounts whenever you are ready.

A traditional IRA consists of a variety of accounts. These accounts can be a 401(k), 403(B), or any other retirement account that is profit sharing. To rollover these plans, they need to qualify and be approved beforehand. An insurance agent will do this, and they will let you know if the account can be rolled over.

Traditional IRAs are retirement plans that are usually tax-deferred. This can be beneficial in terms of contributing and accumulating money in that account. Think of it as receiving gains on your account without paying taxes. Let’s look at what an IRA Rollover entails and whether you can start the process for it today.

An IRA Rollover basically takes the assets you have gained in one IRA account and transfers them to another IRA account. When this is done the right way, assets are protected, there are no penalties, and the tax-deferred status stays the same.

Original IRA accounts may have been started with a former employer or individually. It doesn’t necessarily matter where it was started; it can still be rolled over. Many like to do this to keep assets in the same place and have a singular contribution account. You can add to this new IRA Rollover account with your income or with stocks.

The minimum age that you can remove your money from this account is 59 ½ years. If you keep your money in there after the age of 59 ½, then the maximum increases. This is called a catch-up contribution. The amount for this depends on the year, so ask the insurance agent to make sure that you know the correct maximum contribution limit.

The Rollover Process

There are two types of rollover actions you can take: direct and indirect. Most financial advisors and insurance agents will recommend the latter. This is because a direct rollover involves the direct transfer of your retirement savings to your IRA account provider of choice. In other words, there is no chance of the check getting lost or misplaced. Not to mention, doing a direct transfer means you do not run the risk of your money being taxed during the transfer.

An indirect transfer, on the other hand, is where the money is sent directly to you or the account holder in check form. While this might seem like a good option, there are several issues that can come up. First and foremost, this money will likely be taxed since you withdrew it completely from your account, and even though you will be redepositing it into an IRA.

Furthermore, once you receive the check, you are required to mail it to your IRA account provider within 60 days of its receipt. Failing to do so can result in additional penalties and fines. There is no reason for an individual to choose an indirect transfer unless, for instance, they are doing a partial cash withdrawal. For the best option that fits your situation, contact Best Life Insurance today!

The first process is a direct IRA Rollover. This involves taking the money in the old account and transferring it straight to the new one in what is known as a direct transfer. Most financial advisors recommend this method because there is less chance of the check getting lost in the mail or of something happening to it. It also places less responsibility on you to meet the deadline of sending the check to your IRA within 60 days of receiving it.

Indirect IRA Rollover is the second process. With this, the old account would be closed, you are sent a check with your assets, and you must transfer to a new IRA account.

Someone would do an indirect IRA Rollover because they haven’t found an insurance company that they want to use. But since you have found us at Best Life Insurance, we recommend going with the direct IRA Rollover.

The first rule deals with the kind of insurance accounts that can go through the IRA Rollover process. When starting this process, you want to ensure that the old account being rolled over can go through that process. This is because you want to minimize the number of tax penalties that you might have.

So, most of the time, agents will advise that a certain IRA account goes through the IRA Rollover to the same kind of account. This makes it easier for you in the long run. There is no cap on the amount of money you can rollover or contribute once you rollover. You can continue the same way you were contributing before. The only difference is that there is a different account.

Tax Rules

Like we said before, this plan is tax-deferred. So, add and contribute as much as you would like, up to the maximum, and it won’t be taxed. But once you want to withdraw this amount after the age of 59 ½, it will be taxed. It is taxed as an income and not based on your capital gains. The rate of the tax you must pay is determined by the rate during the year that you withdraw the money.

If you happen to withdraw the amount before the age of 59 ½, then you will pay a ten percent penalty, and you will still have to pay the tax on it as well. It is always recommended to keep your money in there no matter what happens so that you don’t have to pay more than you need to. Once you withdraw that money is yours, so at least wait the minimum number of years.