When it comes to rolling over your IRA there can be a lot of positives. You can get involved with better investments and you have the chance to get better returns. However, it must be done correctly; otherwise you can risk severe penalties. The following are just some of the mistakes you can make once you decide to rollover your IRA. If you avoid these mistakes you can really benefit from rolling over your IRA.

Don’t Delay

Before you take out the funds from your IRA to perform the rollover, you should have a plan in place. You don’t want to get the money and then be stuck trying to find the right broker or custodian to help you manage your IRA funds. The reason for this is because you only have 60 days from the time you withdrawal your IRA funds to finish your roll over. You can try filing for a waiver or extension on the 60 days from the IRS but it is best to simply have a plan in place to get the rollover completed within 60 days.

If you do not get the rollover done within 60 days then it will viewed as a regular distribution of funds. This means that it will be taxed as income. If you are younger than 59 ½ it will also be penalized with a 10% tax on the withdrawal. So it is very important that you know what you are doing before you request the funds to be released.

The One Year Wait

Another reason why you want to have a solid plan in place for your rollover is that you must wait one year before you rollover your IRA funds again. So if you do a rollover without fully researching the custodian or knowing what was involved, you are stuck in that situation for at least a year. You cannot rollover any funds left in your original IRA account or the funds that you placed in the new IRA account.

Same Property Rule

When you rollover assets from one IRA to another IRA the assets must stay the same, otherwise it will be seen as a distribution. What this means is that you cannot withdrawal funds from your IRA to buy stocks or gold and then deposit those assets into a new IRA. The IRS would view it as a distribution because you spent the money from the IRA, so it would be taxed as income at the end of the year. It would also be subject to the 10% penalty if the money was taken out before you turned 59 ½.

Rolling Over Assets Too Early

There are also specific things to keep in mind if you are under 59 ½ and you have a 401 . If you have a 401 (k) that you want to rollover to an IRA then you must be 59 ½, otherwise the rollover will be subject to the 10% penalty. There are very few ways to avoid this so it is best to just wait until you reach the age of 59 ½ to rollover your 401(k).

When you are considering a rollover of your IRA it is important to know the rules that apply to your specific IRA. You do not want to suffer through unnecessary penalties with your rollover simply because you did not know the correct way to do it. If you have any questions you can speak with the custodian that you are planning to transfer your IRA to, or you can speak with an independent financial adviser.

If you are planning to rollover your IRA into a self-directed IRA or to a gold IRA then you will need to do all your research beforehand because it can be very hard to find the right company to work with. There are plenty of companies that offer help with IRA to gold rollovers but they all may be trustworthy or offer the best price for your gold. You should feel comfortable talking over all your concerns with whoever you choose and that they are willing to give you the time to consider your rollover options.

Once you have chosen a company or custodian that you feel you can trust then you can start the rollover process. Often they will be able to take you through the process and make sure that the transfer of funds goes smoothly. Then once the funds are transferred they will give you updates on the assets that are being purchased with that IRA so you can be sure your investment and your retirement fund is being handled properly. As long as you avoid these mistakes your IRA rollover will go over smoothly and you will not face the penalties of a bad decision or an early withdrawal.

Now that you know the right way to do your IRA rollover it is time to find the right options for you to make sure that you get the most out of your IRA.