Some of your previous retirement accounts can be rolled over to your Guideline 401(k) through either a direct or an indirect rollover. This article outlines the differences between these two rollover options to help inform your decision.
With a direct rollover, your previous provider disburses your assets by making them payable directly to your new custodian for your benefit. A direct rollover is often preferred as there are no tax implications with this option and there are no limits to the amount of times you can do a direct rollover during a year. See this article to learn more about rolling over your retirement account to Guideline via direct rollover.
An alternative rollover method to consolidate your funds into Guideline is an indirect rollover. With an indirect rollover, your previous custodian disburses your assets directly to you. A 20% federal mandatory withholding and applicable state withholdings are applied to an indirect rollover. Once the funds are received, you would then be responsible for depositing the entire amount, including any taxes withheld, into your new retirement account within 60 days to avoid a taxable event. Additionally, you are only allowed to make an indirect rollover between providers one time per year.
Though we do not recommend an indirect rollover, some people use the 60-day window as a short-term loan of their retirement assets. If the full amount is not deposited to the new custodian within 60 days, any amounts not rolled over will be deemed distributed, taxable and may be subject to early withdrawal penalties.