Retirement Transfers/Rollovers

Want to consolidate your IRAs all in one place? We can help.

We make it easy to bring your IRAs together to help make tracking and managing your investments easier. But first, you'll have to understand a few of the basics involved with these transactions.

Below are definitions of the three types of transactions involved with moving employer-qualified plan (IRA, 401K, section 457, TSA, etc) funds from one place to another, and what you'll need to know about each.

Trustee Transfer:

A trustee transfer is the movement of IRA funds between financial institutions. In this transaction, the following happens:

• The new IRA trustee receives the funds directly.
• The check is made payable to the new financial institution "as trustee for" you.
• You never take receipt of the funds.

Direct Rollover:

A direct rollover is the movement of funds from an employer-qualified plan (401K, section 457, TSA, etc) to a Traditional IRA (direct rollover is not permitted to a Roth IRA). In this transaction, the following happens:

• The IRA trustee receives the funds directly (payable to the Trustee for your benefit) and you never take actual receipt of the funds.

Indirect Rollover:

An indirect a rollover is the movement of funds from a retirement plan (IRA, 401K, section 457, TSA, etc) at one financial institution, to an IRA at another financial institution. However, in this transaction, you actually take receipt of the funds because the check is payable to you. In this transaction, the following happens:

• The financial institution managing the retirement plan (IRA, 401K, section 457, TSA, etc) issues a check made payable to you.
• You receive a Form 1099R to report the distribution to the IRS.
• At tax time, you will have to prove the funds were "rolled" to another IRA in the appropriate manner (within 60 days) in order to avoid paying taxes on the funds. To do this, you will receive a 5498 Statement from the accepting financial institution indicating that the funds were re-contributed to an IRA by "rollover". Because tax penalties can be assessed if not handled properly, we recommend that you check with your tax advisor before initiating this type of transaction.

What else you should know.

• Before initiating any retirement funds transfer,

  it's important to check with your current financial IRA custodian/trustee to find out if any fees or penalties are associated with these transactions.
• To send retirement funds to Illinois State Bank as a retirement Rollover or a Trustee Transfer, fill out an IRA Contribution Form.
• To have Illinois State Bank send funds from an IRA to another financial institution as a Rollover or a Trustee Transfer, fill out an IRA distribution form.

You may also want to consider products and services provided by North Shore Investment Services.