Rollover IRA

A tax-free distribution and subsequent reinvestment from a qualified retirement plan into an Individual Retirement Account. Rollovers often take the form of a trustee to trustee transfer, meaning funds pass from one institution directly to another. However, if the account holder elects to receive the funds they typically have 60-days from the date of distribution to reinvest the proceeds into a (rollover) retirement account, or they would potentially be subject to both taxes and early withdrawal penalties if under age 59½.