What type of account can my rollover IRA be put into? It’s a common question and the answer depends on what kind of return you want to see on your investment. Certain types of account will provide a much greater ROI than others, so you need to do your research and know exactly what you’re getting into before moving your money.
Since you are only allowed one IRA rollover per year, it is particularly important that you choose wisely when it comes to investing your retirement funds. Once you have gotten a check made out to you for the amount of the rollover, you must complete the transaction by depositing those funds into the new account within 60 days or you could be subject to penalties and taxes.
If you have asked yourself what type of account can my rollover IRA be put into, then you should consider the parameters of the various accounts. The most common type of account, offered at most banks, is an IRA-CD. While this is certainly a stable type of account, it also offers an extremely limited ROI. Generally speaking, most IRA-CD’s only result in returns of about 4%.
Mutual funds and stocks can offer the promise of a greater return but in most cases this type of account, overseen by a custodial company or stock broker, offers less than an 8% return. And the vagaries of the stock market can cause some people to be concerned, particularly given the current shaky status of the market.
Most employers and small business owners offer 401k accounts as a means of investment. While a 401k is certainly a valid answer to the question what type of account can my rollover IRA be put into, it is rarely the best choice. For one thing, most 401k’s offer a very limited ROI and on top of that, they are controlled by your employer, which means you have no say over how your money is handled.
A Roth IRA is an attractive option for many investors but Roth accounts are not without their pitfalls. Rollovers to Roth accounts are a bit more dicey as the entire account value will be subject to taxation as income for that year, leaving you open to a potentially large tax payment.
When it comes to asking yourself what type of account can my rollover IRA be put into the best answer is a self directed IRA. A self directed account puts the control into your hands, giving you the freedom to invest your money as you see put. This also gives you the ability to invest in real estate, which is normally a more stable and sound investment than stocks and can result in as much as 30% ROI.
There are many options for IRA rollovers and no reason why your retirement funds should sit in one place and collect dust…and very little interest. Look into your choices and decide which is best for you, then get your money working. You can begin building for your future today with a well placed IRA rollover.