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Is an IRA rollover right for you?

January 22, 2024

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Your future, is your choice – are you aware of your IRA Rollover options? If you are looking to maximize your savings, create flexibility, or even switch up your customer service, it may be worth discussing an IRA rollover with your financial or tax advisor this year. Sound intimidating? Don’t worry, we’re here to break it down, just in time for your annual tax filing.

 

What is an IRA rollover?

An IRA rollover is a tax-free distribution of funds from one retirement account to another retirement account. In this article we will cover types of rollovers, why you might want to consider one, and some key tips to avoid penalties and unexpected fees. Better yet? You can earn $300 bonus2 for a qualifying rollover to Columbia Bank, which means more savings, for your future. See below for offer details.

We always recommend leveraging a financial or tax advisor before conducting a rollover, so you can feel confident in your choice.  Wondering where to start? Let’s take a closer look.

 

Types of rollovers:

When considering an IRA rollover, there are two primary types.

  • Direct rollovers: can be considered the “safer” way to move funds. In a direct rollover, you will fill out required paperwork so that your current financial institution moves funds to a new institution of your choice. When you select a direct rollover, you will have peace of mind knowing that this rollover is conducted on your behalf, without you ever having to touch the funds.
  • Indirect rollovers: allow you to receive and handle the funds yourself. However, there is risk. When visiting your current financial institution, be clear on your intentions so that your withdrawal is reported as a rollover to the IRS. Once received, you will have 60 days to deposit the funds into another IRA account. If you do not meet the 60-day requirement, your withdrawal will be treated as a taxable distribution.

 

Who Typically Uses IRA Rollovers?

  • Retirees
  • Job Changers
  • Retirement Account Consolidators
  • Investors Seeking Flexibility

 

Why you might consider a rollover:

We always recommend consulting with your financial or tax advisor for your specialized financial goals, we have summarized some of the most common rollover reasons:

  • Added savings: When you roll over an IRA of $50,000 or more to Columbia Bank, you could be eligible for a $300 bonus2. Additional IRA CD terms1 may qualify for a bonus2.
  • Flexibility: A new plan may mean new investment opportunities with different rates, terms, and more. Plus, you will get to experience Columbia Bank’s award-winning customer service for yourself.
  • Consolidation: Combining multiple retirement accounts into a single IRA can simplify management and potentially reduce fees.
  • Change in employment: If you switch jobs or retire, you may have options to leave your retirement account with your former employer, receive payment subject to tax laws or rollover your account to a new employer or existing IRA.
  • Some individuals choose an indirect rollover to free up funds for 60 days or less. This may occur in instances where you incur upfront costs to be reimbursed later. For example, your job requires you to relocate and pays moving costs within 30 days. Nonetheless, if IRS guidelines are followed, you can execute a rollover without tax implications.
  • Estate planning: Being smart with your IRA now with benefit you or your beloved beneficiaries in the future. If you are considering a rollover, it is a great time to review beneficiaries, expected returns, and more.

 

Key Rollover Takeaways:

  • There is no limit on how many direct rollovers you can conduct per year, but indirect rollovers are limited to one per 12-month period. Remember it’s crucial to follow the Internal Revenue Service (IRS) rules to avoid paying taxes and penalties.
  • While our teams cannot advise you on what to do, we hope that you will keep Columbia Bank in mind when making your decision.
  • We’ve designed individualized retirement plans so you can confidently grow your money in a safe and secure account.

 

We’re proud to be serving our communities for nearly 100 years. To take advantage of our IRA rollover offer, contact your local branch today.

 

Your Future, Your Choice

$300 BONUS

When you roll over an IRA CD with $50,000 or more.2
New money only.1

 

18 Month IRA

5.00% APY1

Additional IRA CD terms may qualify for a bonus.

View Rates

[1] Annual Percentage Yields (APYs) are current as of 2/8/2024 and subject to change without notice. Offer applies to new rollover Traditional or Roth IRAs only. (“New” money is defined as deposits not previously held by Columbia Bank.) The minimum balance to open this IRA is $500 and the minimum to obtain the APY is $0.01.

[2] However, to receive the cash bonus of $300 the minimum to open is $50,000.00. The bonus paid will be credited to your account within 10 days after rollover account opening. The IRA must remain open for at least six consecutive months to receive the cash bonus. If closed before the six month period, the entire cash bonus amount will be withdrawn from the proceeds. The bonus paid may be taxable income if withdrawn, consult your tax advisor. Penalty may apply for early withdrawal. Please consult a tax advisor regarding tax savings and IRA rollover eligibility rules. Other certificate terms available. This offer may be withdrawn or modified at any time. Fees may reduce earnings. Offers subject to change without notice. Limit one per customer.

 

Additional sources:

https://www.irs.gov/retirement-plans/plan-participant-employee/rollovers-of-retirement-plan-and-ira-distributions

https://www.investor.gov/additional-resources/retirement-toolkit/self-directed-plans-individual-retirement-accounts-iras#:~:text=Individual%20Retirement%20Accounts%20(IRA)%20provide,Contributions%20typically%20are%20tax%2Ddeductible 

https://www.investopedia.com/terms/i/ira-rollover.asp

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