What is the 60 day withdrawal rule?

The IRS allows individuals to roll over their IRA or retirement plan distributions to another plan or IRA within 60 days of receipt. This period is crucial to ensure tax-deferred status and avoid potential penalties.

The 60-day window provides flexibility for investors to transfer their funds without facing immediate tax implications. It's a valuable tool for those looking to reorganize their retirement portfolios.

However, unforeseen circumstances can sometimes hinder individuals from meeting the 60-day deadline. In such cases, the IRS may consider granting a waiver, allowing for a late rollover.

To qualify for a waiver, taxpayers must demonstrate that their failure to complete the rollover within the prescribed time frame was due to circumstances beyond their control. Examples include serious illness, death of a family member, or natural disasters.

Applying for a waiver can be a complex process, requiring careful documentation and adherence to IRS guidelines. It's essential to seek professional advice to ensure a successful outcome.