Advantages of Rollover IRAs
A Rollover IRA is the name given to the actual process of transferring funds or savings from your retirement account at your workplace into an Individual Retirement Account referred to as an IRA. A rollover IRA has several advantages. The main benefit is that your savings from your work plan will remain in a tax deferred status. Another advantage to an IRA account is the ability for the employee to invest in a more diversified portfolio. By offering a variety of investment choices, the IRA also offers more stability and insurance against economical and market changes.
An employee who is considering making a job change or career change may find that a rollover IRA is the best option to limit their tax liability. Transferring money from a 401K retirement plan to a rollover IRA may enable the employee to defer taxes on these funds.
When transferring funds from a 401K account to an IRA retirement plan, the employee must be careful that the transfer falls within the aloted time given by the IRS. Once an employee decides to withdraw funds from a 401K plan, the employee has 60 days to reinvest the funds into a retirement account. If this deadline is not met, withholding tax may be held from the 401K account. For this reason, a direct transfer is the safest option to avoid any tax penalties.
IRA real estate investments have become a more popular option since the downturn in the economy. While property values have decreased in many areas of the country, real estate remains one of the safest investments for retirement.
Gold IRA’s have also become popular during the last few years. The falling dollar and volatile markets have played a significant roll in making gold an attractive investment. The recent decline in the dollar has added an element of fear to the investment community. The currency that was once the gold standard has suffered a lapse confidence since the collapse of the banking industry.
401K VS. Roth IRA