Rollover
Moving retirement funds from one tax-advantaged account to another without triggering current taxes.
A rollover transfers money from one retirement account to another — for example, from a 401(k) to an IRA — while preserving its tax-advantaged status. A direct (trustee-to-trustee) rollover moves funds straight between custodians and avoids mandatory withholding.
Done correctly, a rollover is not a taxable event. Indirect rollovers, where you receive a check, have strict 60-day deadlines and withholding rules, so the direct method is usually simpler and safer.
Example
A retiree requests a direct rollover so their 401(k) balance moves straight into an IRA without taxes or withholding.
This definition is for general educational purposes only and is not financial, tax, or legal advice. Tim Hartle is an independent insurance professional. Annuity guarantees are subject to the claims-paying ability of the issuing insurance company and are not FDIC insured. Rules and product features vary by situation and by state. Please consult a qualified advisor about your own circumstances.
Related Terms
401(k)
An employer-sponsored retirement plan funded by payroll contributions, often with an employer match.
Traditional IRA
A tax-deferred individual retirement account where withdrawals are generally taxed as income.
Qualified Money
Retirement funds held in tax-advantaged accounts like IRAs and 401(k)s, generally taxed when withdrawn.
Go Deeper
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Annuities are insurance contracts. Guarantees, including guaranteed lifetime income benefits where available, are subject to the claims-paying ability of the issuing insurance company. Product features, fees, withdrawal restrictions, and surrender charges vary by contract.