1. What is an IRA Rollover?

An IRA rollover is the process of moving retirement funds from one retirement account to another, typically from a 401(k) to an IRA. This calculator helps estimate the net value after accounting for applicable taxes during the rollover process.

2. How Does the Calculator Work?

The calculator uses the rollover formula:

Where:

• \( \text{IRA Balance} \) — Current balance in the IRA account ($)
• \( \text{Tax Rate} \) — Applicable tax rate for the rollover (%)

Explanation: The formula calculates the net amount you'll receive after taxes are deducted from your IRA balance during the rollover process.

3. Importance of Rollover Planning

Details: Proper rollover planning is essential to minimize tax liabilities and maximize retirement savings. Understanding the net value after taxes helps in making informed decisions about retirement fund transfers.

4. Using the Calculator

Tips: Enter your current IRA balance in dollars and the applicable tax rate as a percentage. The calculator will show both the net rollover value and the tax amount deducted.

5. Frequently Asked Questions (FAQ)

Q1: What types of IRA rollovers are there?
A: There are direct rollovers (trustee-to-trustee) and indirect rollovers (60-day rollovers). Direct rollovers avoid mandatory tax withholding.

Q2: Are all rollovers taxable?
A: Traditional IRA to Traditional IRA rollovers are generally tax-free. Roth conversions and certain other rollovers may be taxable events.

Q3: What is the 60-day rollover rule?
A: You have 60 days from receipt of funds to complete an indirect rollover to avoid taxes and penalties.

Q4: Can I roll over my IRA multiple times?
A: You can do only one indirect rollover per 12-month period across all your IRAs, regardless of how many IRAs you own.

Q5: What happens if I miss the 60-day deadline?
A: The distribution becomes taxable and may be subject to a 10% early withdrawal penalty if you're under age 59½.