- A direct rollover means that your IRA money is moved directly from one custodian to another, such as from one bank to another. There is no penalty for this type of rollover.
- In an indirect rollover, you receive the withdrawal funds directly but you have 60 days to redeposit them into another IRA. If you do not redeposit the money, you will be subject to the early withdrawal taxes and penalties.
- If you withdraw your IRA and receive the money yourself, and you have not reached the age of 59.5, you will have to pay at least a 20 percent early withdrawal penalty and tax.
- In extenuating circumstances, such as a natural disaster, you can request that the Internal Revenue Service extend the 60-day deadline for an indirect rollover.
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