Frequently Asked Questions
A traditional IRA is a way to save and invest for your future while receiving tax benefits. In a traditional IRA, you do not need to pay tax fees on contributions until you are ready to withdraw your money. Traditional IRAs have a few rules regarding taxes, withdrawals, and contributions that you should be aware of before opening and contributing to an IRA account.
Rollover IRAs allow you to move from an employer-sponsored retirement account like the 401k to an IRA. IRA rollovers can help you preserve the tax-deductible status of your assets and give you access to the benefits and investment opportunities of an individual retirement account. With an IRA rollover, your money grows tax-deferred, and you should not have to pay early withdrawal penalties at the time of the rollover.
A rollover IRA can be considered the IRA it was moved into at the time of the rollover. For example, if a 401k account was transferred into a traditional IRA, then the rollover IRA is a traditional IRA. If a 401k or 403b transfers into a ROTH IRA, the rollover is a ROTH IRA. This means a rollover IRA is a traditional IRA if the employer-sponsored retirement account is transferred into a traditional IRA. Additionally two IRAs can be combined when you roll money from one IRA to another.
