Hold on to more of your retirement savings
The IRS gives you 60 days to complete a rollover1 when you withdraw funds from any qualified employer plan or other IRA to a new IRA. If you take longer than that, the transaction will be treated as a distribution, and considered taxable income. You could even receive an additional 10% penalty on the withdrawal if you’re younger than 59½.2
Know your contribution limits
The maximum Traditional IRA or Roth IRA contribution is $5,500 for 2017 ($1,000 more if you're age 50 or older).3 If you want to contribute the maximum amount to a Roth IRA, your adjusted gross income (AGI) in 2017 must be below $116,000 if you’re single, and $183,000 if you’re married, filing jointly.
Don’t withdraw funds too early
You can access your Roth IRA contributions anytime, tax free. Never pay taxes on earnings when making qualified withdrawals, which are made after five years of first contributing to any Roth IRA and you are either over age 59 ½, disabled, or buying a first home.
If you take money out of either a Traditional IRA or Roth IRA before you turn 59½ years old, you may face a 10% penalty.
Some exceptions apply, like pre-1987 contributions to a retirement plan, and a retirement plan where you’re still working after age 70½. The rules for required minimum distributions can be complicated, so talk to your tax advisor for additional support.
1 Prior to rolling over, consider your other options. You may also be able to leave money in your current plan, withdraw cash or roll over the assets to your new employer’s plan if one is available and rollovers are permitted. Compare the differences in investment options, services, fees and expenses, withdrawal options, required minimum distributions, other plan features, and tax treatment. Speak with a TIAA consultant and your tax advisor regarding your situation. Learn more.
2 Please be advised that effective January 1, 2015, you may only complete one 60-day rollover between any of your IRAs in any 365 day period. This new IRS rule does not impact direct trustee to trustee transfers between IRAs. For more information please visit www.irs.gov/Retirement-Plans/IRA-One-Rollover-Per-Year-Rule .
3 TIAA-CREF Individual & Institutional Services, LLC, and its affiliates do not offer tax or legal advice services. Individuals should consult with a qualified independent tax advisor, CPA and/or attorney for specific advice based on the individual’s personal circumstances.
Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF), New York, NY. Each is solely responsible for its own financial condition and contractual obligations.