'For Insperity employees, understanding the difference between an IRA transfer and an IRA rollover can help reduce avoidable mistakes and keep retirement planning on track, making it worthwhile to review these decisions with a financial professional before moving retirement assets.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement Group.

'Insperity employees who understand the rules surrounding IRA transfers and rollovers are often better positioned to make informed retirement planning decisions and reduce the likelihood of unnecessary complications when moving retirement assets.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

1. The difference between IRA transfers and IRA rollovers, and why the distinction matters.

2. The IRS one-per-12-month IRA rollover rule, including key exceptions and common mistakes that can lead to tax consequences.

3. Practical strategies to help Insperity employees move retirement assets while reducing the likelihood of taxes and penalties.

There are several reasons why investors relocate their IRAs. They might wish to merge multiple IRA accounts, work with a different financial advisor, or switch financial institutions. For Insperity employees preparing for retirement or managing retirement savings alongside workplace benefits, it is important to understand the regulations governing IRA transfers and rollovers to preserve the tax-deferred status of retirement assets. Although many investors believe they can transfer IRA assets as frequently as they like, the regulations vary depending on the approach taken. For instance, trustee-to-trustee transfers are exempt from the 12-month limit, whereas IRA-to-IRA rollovers can only be completed once.

Knowing the distinction between a transfer and a rollover can help reduce the chance of costly mistakes if you intend to move your IRA, especially when coordinating retirement assets with benefits earned during your career at a Insperity company.

Rollover vs. IRA Transfer

After obtaining permission from the IRA owner, the receiving financial institution usually arranges the movement of assets through a trustee-to-trustee transfer. For Insperity employees, the assets are deposited directly into the same type of IRA as a nonreportable transaction when the receiving institution instructs the distributing institution.

The transfer is not reported on the IRA owner's tax return or to the IRS because the assets move directly between financial institutions. This makes trustee-to-trustee transfers a straightforward option for many Insperity retirees.

It is possible to move money between two Roth IRAs and between two traditional IRAs, including SEP and SIMPLE IRAs. However, before the SIMPLE IRA has completed its two-year participation period, it cannot be transferred to a traditional IRA (or vice versa). When the initial SIMPLE IRA contribution is made, this two-year period begins. Transfers and rollovers involving SIMPLE IRAs are generally restricted during that time, making it important for Insperity employees to understand the applicable rules before moving retirement assets.

When an IRA-to-IRA rollover occurs, the IRA owner receives a distribution and redeposits the funds into either the same IRA or another IRA. For Insperity employees, after receiving the distribution, the rollover generally must be completed within 60 days.

Form 1099-R reports the distribution to both the IRS and the IRA owner, while Form 5498 reports the rollover contribution. In addition, the taxpayer's tax return should accurately reflect both transactions, an important consideration for Insperity retirees.

The IRA One-Per-12-Month Rollover Rule

The number of trustee-to-trustee transfers between IRAs is unlimited. IRA-to-IRA rollovers, however, are generally limited to one every 12 months, a rule every Insperity employee should understand before initiating a rollover.

For example, a person cannot complete another IRA-to-IRA rollover within the following 12 months if they take a distribution from a traditional IRA and roll it into the same or another traditional IRA. For purposes of the one-per-12-month restriction, all of a person's traditional, Roth, SEP, and SIMPLE IRAs are considered together because the rule applies on an individual basis.

Example 1:  In May 2026, Mary receives a distribution from traditional IRA number one and rolls it into traditional IRA number two in June of the same year. Mary cannot complete another IRA-to-IRA rollover for any of her IRAs during the following 12 months. This same rule applies whether or not someone is employed by a Insperity company.

All IRA types are subject to this restriction. Mary also cannot complete a Roth IRA-to-Roth IRA rollover during the same 12-month period after completing the traditional IRA rollover.

Example 2:  In August 2026, Lupita receives a $25,000 distribution from her traditional IRA, which she rolls into another traditional IRA within 60 days.

Six months later, Lupita withdraws $10,000 from her Roth IRA with the intention of rolling it into another Roth IRA within 60 days. The second rollover is not permitted because she has already completed a traditional IRA-to-IRA rollover. All of her IRAs are subject to the one-per-12-month rollover rule. She must wait until the 12-month period that began with the August distribution has ended before completing another IRA-to-IRA rollover. This is an important rule for Insperity employees to remember.

The one-per-12-month restriction would not have applied if Lupita had completed the traditional IRA transaction using a trustee-to-trustee transfer instead of a rollover.

Roth Conversions and Employer Plan Rollovers Are Exempt from the Rule

The one-per-12-month rollover limit does not apply to Roth conversions or rollovers to or from employer-sponsored retirement plans. These exceptions may provide additional options for Insperity employees who discover that a second IRA-to-IRA rollover would exceed the one-per-12-month limit.

For example, Jack successfully rolls a distribution from traditional IRA number one into traditional IRA number two. A few months later, Jack wants to move another distribution from traditional IRA number two into traditional IRA number three. Before doing so, he learns that the second rollover would exceed the one-per-12-month IRA rollover limit.

Fortunately, Jack participates in a 401(k) plan that accepts rollover contributions from traditional IRAs. This may also be an option available to some Insperity employees depending on their retirement planning strategy.

Jack rolls the distribution into his 401(k) instead of another IRA. Rollovers from IRAs into employer-sponsored retirement plans are permitted because they are exempt from the one-per-12-month restriction.

Generally, only the pre-tax (taxable) portion of a traditional IRA may be rolled into a qualified employer-sponsored retirement plan. Nondeductible (after-tax) basis generally cannot be rolled into the plan, something Insperity employees should remember when evaluating rollover options.

If Jack does not have access to an employer-sponsored retirement plan, another option may be to complete a Roth conversion. The one-per-12-month rollover restriction does not apply to Roth conversions.

In most cases, a Roth conversion creates taxable income. However, it allows assets to continue growing in a Roth IRA, where future qualified withdrawals may be tax-free. This may be a topic worth discussing with a financial professional if you are a Insperity employee approaching retirement.

How to Reduce Issues with IRA-to-IRA Rollovers

Whenever possible, consider using the trustee-to-trustee transfer method instead of the rollover method when moving assets between IRAs. Trustee-to-trustee transfers are exempt from the one-per-12-month rollover restriction, the 60-day deadline, and IRS reporting requirements, making them an attractive option for many Insperity employees.

In certain situations, a rollover may still be appropriate. For example, an IRA owner may need temporary access to the funds and intend to redeposit them within 60 days. In those situations, the one-per-12-month IRA-to-IRA rollover rule should be followed carefully. An error could result in an invalid rollover and cause what was intended to be a tax-free movement of retirement assets to become a taxable distribution.

Before initiating a rollover, speak with your financial professional or tax professional to determine whether the transaction qualifies for rollover treatment and whether another approach, such as a trustee-to-trustee transfer, may be a better fit. This is especially valuable for Insperity employees coordinating IRA decisions with their overall retirement strategy.

Help with Retirement Planning

Understanding the rules governing IRA transfers and rollovers is an important part of managing retirement assets and reducing the likelihood of unnecessary taxes or penalties. Whether you're still working or preparing to retire from a Insperity company, understanding these rules can help you make more informed decisions. The Retirement Group can help you evaluate your retirement planning options and answer questions about your retirement strategy. Call  (800) 900-5867  to speak with a retirement professional.

Sources:

1. Internal Revenue Service.  Individual Retirement Arrangements (IRAs): Contributions (Publication 590-A).  U.S. Department of the Treasury, 2025,  https://www.irs.gov/publications/p590a .

2. Charles Schwab & Co., Inc.  IRA Rollover Rules: What Investors Need to Know.  Charles Schwab,  https://www.schwab.com/ira/rollover-ira .

3. Fidelity Investments.  IRA Rollovers: Rules, Options and Considerations.  Fidelity Investments,  https://www.fidelity.com/retirement-ira/401k-rollover-options .

4. Financial Industry Regulatory Authority (FINRA).  Rollovers of Retirement Plan and IRA Assets.  FINRA Investor Education Foundation,  https://www.finra.org/investors/insights/rollover-retirement-plan-assets .

5. U.S. Securities and Exchange Commission.  Investor Bulletin: Rolling Over Assets from Your Employer-Sponsored Retirement Plan into an IRA.  U.S. Securities and Exchange Commission,  https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins .