submitted by Rosemary G. Caligiuri, CASL™, President, Harvest Group Financial Services
If you’re asking this question, you probably have a retirement plan through a former employer. The short answer is yes–most retirement plans allow you to roll your plan funds into an IRA. However, there is more than one way to do a rollover.
In most cases, your best strategy is to do a direct rollover. This is a direct transfer of funds from your employer-sponsored plan to your IRA. The administrator of your plan may send the check right to the trustee of your new IRA or may give the check to you to deliver to the IRA trustee. Either way qualifies as a direct rollover as long as the check isn’t made payable to you. Instead, it should be made payable to the IRA trustee. A direct rollover will avoid tax consequences and penalties.