Definition of "Direct Rollover"

A transfer that qualifies as a rollover, but is done directly from one company to another. Usually, it is from a qualified plan into an IRA . It is reportable, but not taxable. The annuitant can avoid having taxes taken out of the eligible distribution by having a direct rollover.

A transfer that qualifies as a rollover, but is done directly from one company to another. Usually, it is from a qualified plan into an IRA annuity. It is reportable, but not taxable. The annuitant can avoid having taxes taken out of the eligible distribution by having a direct rollover.