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No. of Recommendations: 2
He should use a direct trustee-to-trustee transfer. There is a rule that allows only one rollover per 12 months. Whether that rule will be enforced this year is unclear (to me; it might have been in one of the COVID-19 laws just enacted). So better to play it safe than discover later that one of the rollovers wasn't allowed and now becomes fully taxable.

Ira
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No. of Recommendations: 6
We have decided to take lump sum from 2 of DH's pensions and roll them over to a traditional IRA. He's talking about getting the check and depositing it himself, but I am remembering something in the back of my head about that only being possible once a year these days, and there are two different pensions from two different companies he will do this for. He already has the IRA set up, and I am encouraging him to do a direct rollover. Is there any reason why he would have to do so? Am I remembering incorrectly? Would not be surprising as this is just a shadow of a memory.

Your memory is correct. Only a single non-trustee-to-trustee rollover is allowed in any 12 month period. So he could only do that for one of the pensions.

Additionally, if the pension plan writes out a check to him, they will likely be required to withhold at least 20% in Federal taxes, and your state may also require withholding. If he wants to roll the entire amount over, he will have to come up with the cash to make up for that withholding. With a trustee-to-trustee rollover, withholding is not required.

All of that said, please keep in mind if the check that he gets is made out to "DH's IRA FBO DH" (where FBO means For Benefit Of), it is still considered a trustee-to-trustee rollover, since DH can't actually take possession of the money by cashing the check - only the IRA administrator can cash it. So, he can still get a check - it just has to be made out correctly. He would then either have to take it to a branch office for the IRA administrator or send it into the IRA administrator.

AJ
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No. of Recommendations: 2
He should use a direct trustee-to-trustee transfer. There is a rule that allows only one rollover per 12 months. Whether that rule will be enforced this year is unclear (to me; it might have been in one of the COVID-19 laws just enacted). So better to play it safe than discover later that one of the rollovers wasn't allowed and now becomes fully taxable.

Ira
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No. of Recommendations: 0
Your memory is correct. Only a single non-trustee-to-trustee rollover is allowed in any 12 month period. So he could only do that for one of the pensions.

Thanks AJ. Nice to know I am not totally losing it. He looked into it further and it's very easy to do directly. One is already on it's way.

IP
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