The way I read this question the customer takes the distribution and subsequently rolls it into a new retirement plan. Does this imply there is a period of time whereby you can “cash out” the plan (the distribution) and then subsequently reinvest/roll into a new plan? I assumed it had to be a direct rollover to the new plan, which isn’t the way I read the question.
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Hi @Leroy_Ratke, yes, the investor has 60 days to roll the funds into a different qualified account.
Here’s a snippet from an IRS article:
There are many requirements to make a valid rollover contribution including the 60-day requirement. Assuming other requirements are satisfied, you have 60 days from the date you receive a distribution from an IRA or retirement plan to roll it over to another plan or IRA. 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. The IRS may waive the 60-day rollover requirement in certain situations if you missed the deadline because of circumstances beyond your control.
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