60-Day Rollovers Explained:

What High Earners Need to Know Before Moving Retirement Funds

If you’re moving money from a retirement plan into an IRA there are guidelines you should know. Whether moving funds after a job change, retirement, or to reposition assets for better tax efficiency—how you execute the rollover matters just as much as where the money ends up. You should know the 60-day rollover rules.

One of the most misunderstood strategies is the 60-day rollover. While it can work, even a slight misstep can trigger unexpected income taxes, penalties, or permanent loss of tax-deferred status—mistakes we regularly see from otherwise financially savvy individuals.

Below is a practical framework to help you avoid the most common (and costly) 60-day rollover errors.

What Is a 60-Day Rollover—and Why Is It Risky?

A 60-day rollover occurs when retirement funds are distributed to you personally, and you then have exactly 60 days from the date you receive the money to redeposit them into another eligible retirement account.

Miss the deadline—or mishandle the process—and the IRS may treat the entire amount as a taxable distribution, potentially adding penalties if you’re under age 59½. For larger balances, the financial impact can be significant.

Why Direct Transfers Are Often the Smartest Choice

In most cases, a trustee-to-trustee transfer is the safest and cleanest way to move retirement assets. When funds move directly between custodians:

• The 60-day clock never starts
• Mandatory withholding for you may be avoided
• IRS reporting risk can be dramatically reduced

These reasons above are why many highly regarded firms—and experienced advisors—recommend avoiding 60-day rollovers whenever possible.

When a Check Can Still Qualify as a Direct Rollover

Sometimes, a custodian will only issue a check. The good news: not all checks trigger 60-day rollover rules.

If the check is made payable directly to the new IRA custodian (for your benefit), it is still considered a direct rollover—meaning no withholding and no countdown clock. The details on the check matter more than most people realize.

The 60-Day Clock: Timing Is Everything

A common misconception is that the 60 days begin when the check is issued. In reality, the clock starts the day you receive the funds.

Mail delays, travel, or administrative lag can quietly shorten your window. Accurate tracking—and documentation—can be the difference between a smooth rollover and a costly IRS problem.

A Simple Step That Prevents a Big Mistake

Another frequent error occurs when the money leaves the original account and is accidentally deposited into a non-retirement account.

This mistake is often correctable—but only if caught within the 60-day window. A quick verification after deposit can prevent a permanent tax issue.

The “Once-Per-Year” Rule Many Investors Miss in 60-Day Rollover Rules

The IRS limits how often you can perform a 60-day IRA-to-IRA rollover. Once you complete one, you generally cannot do another for 365 days, across all IRAs and Roth IRAs combined.

This rule does not apply to direct transfers—but it has tripped up many high-income investors who were unaware it even existed.

The Bottom Line

A 60-day rollover can work—but it leaves little room for error. For most investors, the best strategy is careful planning, precise execution, and professional oversight to ensure no detail is missed.

If you’re considering a rollover—or want a second opinion on one already in motion—we’re here to help. Click the link below for our checklist, “Avoiding 60-Day Rollover Mistakes Checklist.”

📞 Call one of our talented advisors at 940-464-4104
💻 Or schedule a free virtual consultation

Financial Success Doesn’t Happen by Chance—it’s built through smart strategy and thoughtful execution.

About RFG Wealth Advisory
RFG Wealth Advisory is an independent, fee-only Registered Investment Advisor firm based in Argyle, Texas. As fiduciaries, we are legally and ethically committed to placing your interests first—always—with transparent fees and objective advice.

Investment advice is offered through RFG Wealth Advisory, a Registered Investment Advisor.