A Safer Retirement and Environment – What We’re Implementing to Help Keep You Safe: READ MORE

Here at Fortress Financial, we are adhering to state and local guidelines in order to protect both the health and safety of clients and staff. Keeping our clients and staff safe is our highest priority and we’re taking all appropriate measures to ensure a safe environment. Should you prefer to not meet face-to-face, we are continuing to serve our clients through virtual settings such as Zoom or phone calls.

We look forward to continuing to help individuals and families achieve their ideal retirements.

Fortress Financial
208-233-1685

CLOSE

 

Book or Change Your Appointment

ONE 60-DAY ROLLOVER PER YEAR?

By Andy Ives, CFP®, AIF®
IRA Analyst
Follow Us on X: @theslottreport

 

SCENARIO: In one calendar year, Jessie completes the following transactions:

1. Takes a partial distribution from her 401(k) and does a 60-day rollover to an IRA.

2. Does a 60-day rollover from one traditional IRA to another traditional IRA.

3. Takes another partial distribution from her 401(k) and, within 60 days, deposits the cash directly into a Roth IRA.

4. Takes a distribution from her traditional IRA and, within 60 days, deposits the cash directly into a Roth IRA.

5. Closes out her 401(k) and does a 60-day rollover of remaining plan assets to a traditional IRA.

QUESTION: Has Jessie violated the one-rollover-per-year rule?

ANSWER: No, she has not.

EXPLANATION: The one-per-year rollover rule works as follows: First, it is true that a person can do only one 60-day rollover per year. The rule gets even more strict when you realize it is applicable across all accounts. Also, “per year” is not a calendar-year 12-months, but a rolling 365 days. For example, if a person receives an IRA distribution on May 1 and does a 60-day rollover to another IRA, she is not eligible to do another 60-day rollover from any IRA to another IRA until the following May 1. (Note that the 12-month period begins with the date the funds are received by the account owner.)

However, the finer details of the one-per-year 60-day rollover rule are important so as to be able to maximize the legal movement of funds. The following rollovers ARE subject to the rule:

  • IRA to IRA
  • Roth IRA to Roth IRA

The following rollovers are NOT subject to the rule:

  • Plan to IRA
  • IRA to Plan
  • IRA to Roth IRA (a Roth conversion)

In fact, of the five transactions completed by Jessie listed above, only item #2 was subject to the one-rollover-per year rule. An analysis of each transaction is as follows:

1. Plan-to-IRA rollover. Not subject to the one-per-year rule. A person can do as many plan-to-IRA 60-day rollovers as they wish.

2. IRA-to-IRA rollover. As mentioned, this is Jessie’s only transaction subject to the rule. She cannot do another IRA-to-IRA (or Roth IRA-to-Roth IRA) 60-day rollover for 365 days.

3. Plan-to-Roth IRA. This transaction qualifies as a valid Roth conversion.

4. IRA to Roth IRA. Also, a valid Roth conversion.

5. Plan-to-IRA. No restrictions on these transactions.

https://irahelp.com/slottreport/one-60-day-rollover-per-year/

Ready To Take

THE NEXT STEP?

For more information about any of our products and services, schedule a meeting today.

Schedule a Meeting

Or give us a call at 208-233-1685