When moving your retirement money to an IRA, you should follow this one rule of thumb.
If you fail to follow the rule I’m about to reveal, you can face two big problems.
Here is this very important rule of thumb that you need to follow: Move the money using a trustee-to-trustee transfer. Nothing else.
There are two types of transfers that can be used to move qualified plan distributions into IRAs in a tax-free manner: (1) direct (trustee-to-trustee) rollovers and (2) what we will call traditional rollovers.
If you want to do a totally tax-free rollover, do nothing other than the direct (trustee-to-trustee) rollover of your qualified retirement plan distribution into the rollover IRA.
This is easy to do. Simply instruct the qualified plan trustee or administrator to (1) make a wire transfer into your rollover IRA or (2) cut a check payable to the trustee of your rollover IRA (this option is less preferable than a wire transfer).
Your employee benefits department should have all the forms necessary to arrange for a direct rollover.
If you want to discuss the trustee-to-trustee rollover with me, please schedule your free strategy session by clicking the green “Schedule Now” button now.
P.S. Also use the trustee-to-trustee rollover when moving your IRA to another IRA.
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