There are two types of rollovers: direct and indirect.
A direct rollover is paid from your plan directly to your IRA or to your new employer's retirement plan. The funds are never payable to you.
An indirect rollover is a payment made to you that you later roll over to an IRA or an employer retirement plan.
You have 3 options with a Roll Over:
1. Direct rollover to a new employer's plan.
2. Direct rollover to an IRA.
3. Indirect rollover.
There are two major disadvantages to indirect rollovers. First, your plan is required to withhold 20% of the taxable portion of your payment for federal income taxes. Second, you run the risk of missing the 60-day deadline, which would make your distribution taxable.
Roll Overs require careful planning. Contact us for help.
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