If you don't like your current retirement account, you're usually free to move your money elsewhere. The IRS lets you roll assets from one IRA into another without paying taxes or penalties on the asset transfer. If you decide to shift your rollover into another IRA, you can do that without a penalty too, though the rules are stricter.
You can transfer a rollover IRA to another traditional IRA but you can't do it immediately. Federal IRA rules say that once you roll over assets from account A to account B, you cannot transfer the money from account B for another 12 months. The calendar starts from the moment you withdraw the money from account A, not from when you deposit it. You also can't make another distribution from account A for a year.
When you leave your job, you can roll your 401(k) over into an IRA. Later, you can roll over the 401(k) assets to a different IRA. If either rollover mixes your 401(k) money with regular IRA contributions and earnings, however, that's often a mistake. As long as the 401(k) money just sits by itself, you can transfer it to a new workplace account if you get another job. Once it commingles with regular contributions, that's no longer an option.
If you inherit an IRA from anyone but a spouse, you have to transfer the assets into a new IRA of your own. You cannot move the assets after that: instead, you have to make minimum annual withdrawals from the new account until you empty it. If your spouse rolls some of her IRA into your account as part of a divorce, you get to treat the rollover as if it were yours. That includes being able to move it to other accounts.
To transfer money between IRAs, you either have the account trustee handle it, or withdraw the money and transfer it yourself. If you withdraw IRA money to make a rollover, you have to complete it within 60 days, no more. Deposit it on the 61st day and the IRS treats the rollover as a withdrawal: you pay income tax plus a 10 percent penalty if you're younger than 59 1/2. Trustee transfer is safer.
A graduate of Oberlin College, Fraser Sherman began writing in 1981. Since then he's researched and written newspaper and magazine stories on city government, court cases, business, real estate and finance, the uses of new technologies and film history. Sherman has worked for more than a decade as a newspaper reporter, and his magazine articles have been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life." Sherman is also the author of three film reference books, with a fourth currently under way.