When it comes to transferring or rolling over funds from an IRA or 401(k) plan, there are certain rules that must be followed. The 60-day rollover rule is one of the most important regulations to keep in mind. This rule states that you must transfer the funds from one account to another within 60 days in order to avoid any tax implications. Direct transfers from one trustee to another are unlimited, but if you receive the money yourself, there are restrictions that must be followed.
For example, if your will states that your IRA should go to your daughter, but your sister is listed as the beneficiary on your IRA account, your daughter may not receive the funds. Beneficiaries of a Roth IRA are generally required to accept distributions, and these rules depend on several factors. If you deposit the funds into another IRA and then try to reinvest them within 12 months, the withdrawal will be taxable immediately. You can also make a lifetime reinvestment of a charitable IRA if you want to see your philanthropy in action now. However, if the transfer was made from a traditional (tax-deferred) IRA to a Roth, you'll need to declare and pay taxes on the funds (and associated profits) that are being transferred.
For example, a spouse who inherits an IRA and has many years left before reaching retirement age may consider transferring those assets to their own IRA. You have 60 days from the date you received the distribution of an IRA or retirement plan to transfer it to another plan or IRA. You can transfer any money from an IRA that you saved outside of your employer-sponsored plan to a Vanguard IRA through an asset transfer.
