What is a Rollover IRA Account?

A Rollover IRA is an account that holds funds that have been distributed from an employer’s retirement plan, such as a 401(k). You can roll the funds over from the company plan into your own plan. Such IRAs allow you to consolidate retirement savings while maintaining the tax-deferred status of the savings. A Rollover IRA may offer greater flexibility for investment options and estate planning than employer-sponsored plans like the 401(k) or 403(b) accounts.

For example, let’s say you have had four different jobs, and each one had a company-sponsored 401(k) plan. You now have four different plans at four different companies. Wouldn’t it be easier to have one plan that you yourself own? That’s where a Rollover IRA comes in to play. You could just take each of your company-sponsored plans and roll them over into your own Rollover IRA. If this is done properly, there are no tax consequences, the funds retain their tax sheltered status, and there is no limit on how much you can roll over into your Rollover IRA