What’s the Difference Between IRA Transfers vs Rollovers?

If you’re moving money between retirement accounts, it’s easy to assume a transfer and a rollover are one and the same. After all, both involve shifting funds from one place to another, right? But here’s the catch—how you move your money can impact your taxes, your timeline, and even your peace of mind.

At LaTour Asset Management of Springfield, we’ve seen how confusing these terms can be for investors at all stages. Getting them right is critically important for protecting your savings and staying on course for the retirement you’ve worked hard to build. So, let’s talk about the real differences between an IRA transfer and an IRA rollover, and why choosing the right one—at the right time—can make all the difference.

IRA Transfers

Think of an IRA transfer as a handoff. It happens when you move funds from one IRA to another of the same type (Traditional IRA to Traditional IRA, or Roth IRA to Roth IRA). First, know that:

There are two methods for completing an IRA transfer:

1. Indirect Transfer (money comes to you first):
   1. With indirect transfer, you must deposit the funds into your IRA within 60 days to avoid taxes and penalties.
   1. You’re only allowed one indirect transfer per year per person—a critical rule many people overlook.
   1. If done incorrectly, you could face early withdrawal penalties and unexpected taxes.
2. Direct transfer (money goes straight to the new account):
   1. The money never touches your hands. It moves directly from one institution to another.
   1. There are no taxes or penalties when done correctly.
   1. There’s no limit to how many times you can make these direct transfers in a year.

Transfers are ideal when:

• You want to consolidate retirement accounts for easier management.
• You’re switching financial institutions but not changing account types.
• You’re not looking to access funds, just move them efficiently and securely.

In Springfield, MO, we often help clients who have accumulated multiple IRAs over the years—especially after career changes—combine them into one clear, manageable strategy.

IRA Rollovers

An IRA rollover usually involves more steps and more rules. Again, there are two types of rollovers:

• Indirect Rollovers (money comes to you first).
• Direct Rollovers (money goes straight to the new account).

Let’s focus on the most common use case: rolling over a 401(k) into an IRA. This often happens when:

• You leave a job or retire.
• You want more control over your investment options.
• You’re seeking a more personalized, tax-efficient strategy.

Important considerations:

• With indirect rollovers, you must deposit the funds into your IRA within 60 days to avoid taxes and penalties.
• With indirect rollovers, the 401k custodian will usually withhold 20% for Federal taxes.  This means that if you want the full amount to end up in the IRA, you will have to add back in from your savings the amount withheld for taxes.
• You’re only allowed one indirect rollover per year per person—a critical rule many people overlook.
• If done incorrectly, you could face early withdrawal penalties and unexpected taxes.

That’s why we always recommend direct transfers and rollovers for simplicity and compliance—and why so many in Springfield turn to us to handle the details with care.

Is an IRA Transfer or IRA Rollover Right for You?

That depends entirely on your situation. A transfer may be perfect if you’re simply switching providers or consolidating. A rollover might be necessary when leaving a job or accessing funds from a different type of retirement plan. But here’s what’s most important: you should never make that call unprepared. A misstep could:

• Trigger taxes you didn’t expect
• Delay your retirement goals
• Limit your flexibility down the line

Our job at LaTour Asset Management of Springfield isn’t just to execute the move—it’s to make sure the move works perfectly with your entire retirement strategy.

Planning Your IRA Strategy the Right Way

Transferring or rolling over your retirement accounts shouldn’t feel like a guessing game. At LaTour Asset Management of Springfield, we provide retirement-minded investors with personalized, tax-conscious guidance so every decision—big or small—aligns with long-term goals. We take the time to:

• Review the type of accounts you hold and where they fit into your broader plan.
• Ensure transfers and rollovers are handled correctly and efficiently.
• Integrate those moves into a holistic retirement strategy built around income, tax planning, and peace of mind.

Take the Guesswork Out of Retirement Moves

If you’re unsure whether a transfer or rollover is right for your retirement funds, now’s the time to ask. One small mistake can ripple through your entire plan—but so can one smart move.

Call LaTour Asset Management of Springfield today at (877) 888-5724 to schedule a conversation. Let’s make sure every part of your IRA strategy—transfers, rollovers, and everything in between—moves you one step closer to a retirement that works for you.