Financial Learning Center
- What Initiates a Distribution?
- Five Dates You Should Know
- Selecting a Distribution Option
- Deciding on a Payout Option
- Annuity Form of Payout
- Advantages and Disadvantages of Taking an Annuity
- Taking a Lump-Sum Distribution: Know Your Options
- Annuity vs. Managing Your Own Retirement Assets
- Advantages and Disadvantages of a Lump-Sum Distribution
- The Roth IRA–How Does It Fit In?
- Making the Decision: Annuity or Lump-Sum?
- Taxation of Distribution Options
- Rollover into a Traditional IRA
- Advantages and Disadvantages of Rollover to a Traditional IRA
- Annuity Payouts
- Early Distributions
- Should You Defer Your Retirement Plan Distribution as Long as Possible?
- Distributions Following Death
If you don't need your retirement money in a hurry, rolling it over into a traditional IRA may make sense. Instead of putting the money into a bank account or other investment and paying tax on the earnings, you can defer taxes on both the contributions and the earnings if you put the money in a traditional IRA.
By rolling funds into a traditional IRA, you generally will have more control over the timing of the distribution payments and the investment of the undistributed funds. You can invest the money in practically anything you want (there are a few restrictions, such as not being able to invest an IRA in collectibles), although we suggest you remain more conservative in your retirement years (see the section Fine-Tuning Your Investment Strategy).
It is to your advantage to make it a direct rollover. This way, you don't have to get involved in the transfer and no income taxes will be withheld. If you are still working in retirement, you may have the option of rolling your qualified retirement plan money into the new employer's qualified plan.
IMPORTANT NOTE: If you receive the distribution (i.e., you don't do a direct rollover) and then decide to roll it over to a traditional IRA, you must complete the rollover generally within 60 days.
IMPORTANT NOTE: Since the federal government limits contributions to qualified plans, some employees also participate in nonqualified plans. Unlike qualified plans, money from a nonqualified plan generally cannot be rolled over into an IRA.
Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA (Opens in a new Window)/SIPC (Opens in a new Window). UniVest Financial Services is a trade name of UniBank. Infinex and UniBank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of, nor guaranteed or insured by, any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.