An IRA Rollover VS Transfer By Gordon Hall At Isnare.com Ezine Articles

Knowing the difference between an IRA rollover VS transfer can save you money, when tax-time comes around. Although the terms are often used interchangeably, there are several really big differences between the rules that apply to each. Here’s a quick look, along with a little investing advice.

You see, transfers are like “bank-to-bank” transactions. You initiate the transaction, when you contact a new custodial company, who, in turn, contacts your previous custodial company. Some paperwork will be involved, but the IRS is not notified of the transaction, since you, personally are never in possession of the funds.

True roll-overs require the liquidation of all assets held within the account and a check, made payable to you, is put in the mail. If you choose this option, you should also choose a more secure delivery service than the US mail. Security is just one of the things that make a difference when comparing an IRA rollover VS transfer. Transfers are more secure transactions.

Another thing to consider is this. Rollovers are reported to the IRS. They allow you to take 60 days to find a new custodial company and redeposit the check, with another IRS approved plan. Your new trustee should provide the necessary paperwork, to be attached to your year-end tax documents and prove that you made the deposit within the require time. If something goes wrong, the account balance could be considered regular income for the year. For most of us, that would be a bad thing.

Because of the paperwork involved and the possibility that something could go wrong, when you compare an IRA rollover VS transfer, you probably see that transferring the fund is a better choice. Then, there’s one more consideration.

If you have an all-cash account, as you would if your account was invested in a money market or bank CDs, then taking a roll-over is “okay”. But, generally, there are other assets in these accounts, including stocks, bonds, mutual funds and possibly (if you’re a smart investor) real estate.

Since rollovers require that the trustee provide you with a check, all of these assets must be liquidated. But, many of them may be transferable. If these are assets that you want to hold on to, then it would be silly to sell them, only to re-purchase them, when you open the new account.

That pretty much covers the differences between the IRA rollover VS transfer. Now, let me give you something new to think about.
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A smart investor sees this as an opportunity. Not only an opportunity to make money, but also to help people find decent, affordable homes in desirable neighborhoods. You can tap into this market, using your retirement account. You’ll earn more and help “Main Street, USA”, at the same time. You have probably decided what’s best when it comes to an IRA rollover VS transfer. Now, you just need to find the best investment opportunities.

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