Rollover (Retirement)
RetirementGlossary term
Definition
Moving retirement funds from one account to another, such as from a 401(k) to an IRA when changing jobs. Direct rollovers transfer funds without tax consequences, while indirect rollovers require redepositing within 60 days to avoid taxes and penalties.
Related terms
- Trustee-to-Trustee TransferA direct transfer of retirement funds between financial institutions where you never take possession of the money. This method avoids mandatory withholding and the 60-day rollover deadline, making it the safest way to move retirement assets.
- 401(k)A tax-advantaged retirement savings plan offered by employers that allows employees to contribute a portion of their salary before taxes. Many employers offer matching contributions up to a certain percentage.
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