When money isn't simply handed to you, it's important to prepare for your financial future. You can do this by sitting down with a financial advisor and talking about your financial goals, regardless of how much money you have at this time. When you want to be ready for whatever life brings your way, learning how to accumulate wealth and how to roll over your IRA accounts upon retirement is essential.

Rolling Over Your IRA When You Stop Working

When you are an employee, your IRA and its contributions grow every year and are a tax deferred way to save money for your future. Once you retire, you have to do something with this company sponsored IRA, and many people choose to roll over their IRA into an individual account held in their own name. You can contact your work plan administrator directly and have them pay your disbursements directly to your new IRA to avoid any confusion that you are not taking out the money for your own personal use. This is called a direct IRA rollover and there will be no taxes withheld on this disbursement.

When You've Already Received Your Disbursement

If you received your full disbursement from your IRA, you have 60 days to put this money back into an IRA. While taxes will be withheld from the original disbursement, your money will continue to be able to grow in an IRA account if you are able to deposit the money into a new IRA within the time limit. Some exceptions exist for people who don't put their money into an IRA in time, so it's important to contact the IRS to see what your options are.

Tax Deferment for Continued Growth

The point of rolling over your IRA is to continue to avoid paying taxes on the amount of money you have in your IRA. The money remains tax deferred as long as it is in an IRA. If you take a disbursement out for your own personal use, this money is taxed. The more money you can keep in your IRA, the faster the account will accumulate. This is why people invest in IRAs that use pre-tax dollars as the capital. The investment will grow as fast as possible, and tax penalties occur only upon disbursements. The concept is that it is less likely the tax burden will be a problem for you later in life than it is when you are in the midst of investing for your retirement.