2020 brought in new rules for IRA planning. While they do not affect everyone, they do affect many people who have done well during their life. Many individuals are concerned about how to leave these qualified tax-deferred accounts to their beneficiaries. Your current strategy may have been a Legacy IRA.
The first step is to understand and identify what IRA you have and how it has been affected, or which one meets your goals. There are various kinds of IRAs with different rules and benefits.
When you roll over a retirement plan distribution, you generally don’t pay tax on it until you withdraw it from the new plan. By rolling over, you’re saving for your future and your money continues to grow tax-deferred.
If you don’t roll over your payment, it will be taxable (other than qualified Roth distributions and any amounts already taxed) and you may also be subject to additional tax unless you’re eligible for one of the exceptions to the 10% additional tax on early distributions.