Question: How many times can I rollover an IRA w/o penalty?
Answer:
IRAs can be moved in two different ways, either by a transfer or a rollover.
A Transfer is when the IRA is moved from trustee to trustee. For instance if you had an IRA with “Institution A” and you wanted to move it to “Institution B” you could have “Institution A” transfer the money to “Institution B”. There are no taxes or penalties when doing a transfer.
A Rollover is when money is sent to you “the owner” to “rollover” to another account. To avoid penalties you must complete the rollover into a new account within 60 days. This can get messy depending on your situation because 20 percent of your IRA is automatically withheld for taxes. To avoid paying these taxes you will need to come up with this 20 percent and include it with the rollover check you receive and have both deposited in an IRA within the 60-day window.
The transfers described above can be done as often as you would like.
Rollovers have a 365-day waiting period rule meaning you can only do one rollover a year per IRA.
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