A rollover is simply moving retirement funds (often called "taking a lump sum distribution") from one tax-deferred retirement plan into another tax-deferred retirement plan (often called an "eligible retirement plan"). Whether you roll your lump sum distribution into an IRA or to a new employer's plan, continued tax deferral is the most important benefit. Because you likely did not pay tax on the money in the plan, you can only continue to defer taxes if your assets stay in an eligible retirement plan.
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