Effective 1 January 2015, investors will face stricter rules on how they can move their money between individual retirement accounts or IRAs by limiting them to just one rollover in any 12-month period.
Previously investors were allowed a yearly rollover for each IRA you held. For example, if an investor had multiple IRAs, they could roll each IRA over once a year.
But in a Tax Court decision from earlier this year (Tax Court Memo 2014-21), the judge ruled that, despite the Internal Revenue Service’s past leniency, the law clearly states that there is one annual rollover permitted per person, not one per IRA. This does not affect trustee-to-trustee transfers.
The clarification of the law actually does you a favor by reducing the temptation to make risky changes with your retirement savings. It is dangerous to treat your IRA as a source for short-term loans. If you are late on a repayment, even by a day, the tax ramifications can be harsh.
Source: Robert Steen, USAA News, Insight: IRA Rollover Law Change
In the article, Robert Steen also provides some other IRA advice worthy of a quick read.
This week Thrift Savings Plan (TSP) announced that May 7, 2012 will be the day that the TSP will begin to accept Roth TSP contributions.
With the addition of the Roth TSP option, participants can choose to invest pre-tax or after-tax dollars in any of the TSP funds, up to the Internal Revenue Code limits (for 2012 the maximum amount that you can contribute to TSP is $17,000). TSP participants can currently invest in ten different funds: the five Lifecycle (L) Funds, the Government Securities (G) Fund, and the four broadly diversified stock and bond funds – the Fixed Income Index Investment (F) Fund, the Common Stock Index Investment (C) Fund, the Small Capitalization Index Investment (S) Fund, the International Stock Index Investment (I) Fund.
Money already in your account when you begin making Roth contributions will remain part of your traditional balance. You will not be able to convert it to Roth.
Please visit the TSP website (www.tsp.gov) for more information to help you decide if this new option will benefit you retirement planning.
Roth TSP Flyer – https://www.tsp.gov/PDF/formspubs/tsplf30.pdf
TSP Highlights – https://www.tsp.gov/PDF/formspubs/high12a.pdf