A Traditional IRA is a tax-deferred retirement account. Contributions made to an IRA may be tax deductible, with earnings on IRA accounts also tax-deferred until distribution. Distributions on a Traditional IRA are taxable to the individual investor.
A Roth IRA is a retirement investment that allows all earnings and principal distributions to be distributed tax-free if it is a qualified distribution. The contributions made to a Roth IRA are not deductible on the individual tax return.
An IRA transfer occurs when an IRA is transferred from one IRA custodian to a new IRA custodian, with the IRA funds exchanged between custodians. This transaction is a non-taxable event and can be completed with a Traditional or Roth IRA.
A Rollover IRA is a 403, 457, or other qualified retirement account that is transferred to an IRA custodian, with the retirement funds exchanged between custodians. This transaction is a non-taxable event and can only be completed between a qualified account and a Traditional IRA.
Indirect Rollover IRAs
An Indirect Rollover IRA is a transaction where the IRA holder takes a distribution from the IRA account. Within 60 days of receiving the IRA distribution check, the IRA holder deposits the funds in an IRA. This transaction is a non-taxable event and is completed with a Traditional IRA.