A Roll over refers to moving the eligible retirement funds of an employee that were left with a previous employer to one's individually managed Rollover IRA account.
One can do a rollover leaving a job or changing it.
It is also possible for employees who are retiring to do a roll over.
It means that en employee is taking away the retirement assets after leaving the job.
This ensures that the money continues to grow at a tax-deferred basis, even if it is retirement money.
In other cases, it helps employees build up tax-deferred savings when they change jobs with a direct, trustee-to-trustee rollover.
There are several advantages of doing a roll over, like when your pension funds are in jeopardy as your company is under distress.
Once this is done, you are safe.
Doing a roll over also helps keep pension funds safe in case of company mergers.
It also helps you build a diversified portfolio.
With your IRA account, you can make the investment choices.
It helps cut down on expenses, as your 401K plan fees may be higher than the rollover IRA fees.
If you change your job frequently, it might be difficult to keep track employers.
In these cases, the best option is to roll over your funds to reduce the risk of misplacing or losing tract of your money.
A rollover IRA also provides the flexibility to take out a small part or all of your money, if needed.
However one might have to pay certain taxes and penalties on the amount withdrawn.
There are certain provisions that waive off these penalties.