Moving a Retirement Account: Understanding Rollover IRA
When leaving a job, you have three main options for your retirement account: leave the funds in the old plan, cash out, or roll them over into a new account. Rolling over is often the best choice as it consolidates retirement funds and provides more investment options.
How Rollover to an IRA Works
An Individual Retirement Account (IRA) is a tax-advantaged account that offers various investment opportunities, including stocks, bonds, mutual funds, CDs, and ETFs. The 2025 contribution limit for a traditional IRA is $7,000 for individuals under 50 and $8,000 for those 50 or older.
Key Considerations for IRA Contributions
- IRA contributions may be tax-deductible, depending on income, filing status, and the presence of a workplace retirement plan.
- The ability to open an IRA is widely available through major brokerages.
- Minimum deposit and balance requirements can vary based on the selected investment vehicle.
- Some accounts, like the Schwab One® Brokerage Account, have no account minimum for active investing.
No account minimum for active investing through Schwab One® Brokerage Account.
Author's summary: Rollover IRA consolidates retirement funds and offers investment options.
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