IRA rollovers – How it helps you roll your way into a happy retired life

It needs no mention that you may have to roll over your retirement account at least once in your entire life. Chances are high that you may need to roll over your retirement account when you leave your employer and you take your 401(k) account with you. If you have a number of retirement accounts, it becomes often impossible to keep a track on all the retirement accounts, especially if you have changed a number of job. In order to simplify your retirement saving efforts, you must look for ward to consolidating your retirement accounts with IRA rollovers. Just as debt validation is unknown to most debtors, consolidating retirement accounts with IRA rollovers is also something that is not known by all. Read on to know more about it.

What is the key advantage of rolling over your retirement accounts?

You can easily use the IRA rollover option for transferring a qualified retirement account to a traditional account, or a Roth IRA account to another Roth IRA account without paying any kind of taxes. The withdrawals from your Roth IRAs may be considered as your income and may be subject to the state income tax or the federal income tax by the IRS if it is withdrawn prior to 5 years of participation. Traditional IRA withdrawals may be subject to ordinary income tax as the IRS deems it to be an added income for the senior citizen. Withdrawals from a qualified retirement account, before the age 59 and half, may be subject to a tax penalty of 10% of the withdrawn amount.

If you consolidate your retirement accounts, you’ll find it easier to keep track of multiple retirement balances and investment performance. Receiving fewer statements will be easier for you to keep record and pay less in your annual account fees. You may also adjust your investment portfolio by streamlining your retirement assets and rolling them over.

What is a direct rollover?

With the direct rollover, you can transfer a qualified retirement plan, tax-sheltered annuity and 403 (b) plan into another retirement plan, apart from the IRA. A direct trustee-to-trustee transfer is carried out in this process. The main benefit of direct rollover is that you do not need to abide by the IRS rules.

If you want to track down your retirement accounts, contact your previous employers and go through your tax records. Contact your financial advisors who can help you put your IRA rollover wheels into motion and help you roll over into a happy retired life.

Angela Brown is a contributing writer for a US-based debt communities. Brown’s expertise in the consumer debt industry has given her the opportunity to contribute her work to several financial websites. She writes on the topics including debt consolidation, debt settlement, bankruptcy and related topics.