AFMG - American Financial Management Group

09/02/2026

08/14/2026

We usually talk about the bigger stuff here: sequencing, tax bracket management, the decisions we think will move the needle the most on retirement prospects. But it's often the small, boring things that trip people up and move the needle the wrong way. Moving money from an old 401(k) into a new plan or your IRA sounds simple. It isn't always.

Even in the 21st century, your old plan will often send a check instead of just wiring the money. And it's when you get this check that the confusion can arise.

Someone hands me a check from their old 401(k), saying "it's a rollover," thinking the intent is all that matters. It doesn't. Whether that check is a direct rollover or a distribution comes down to two words printed on the "Pay to the order of" line, and it can cost you real money if you get it wrong.

If the check is made payable to you, the IRS treats it as a distribution, and your old plan is required to hold back 20% before you ever see it. Deposit the rest into your IRA within 60 days and you'd think you're covered. You're not. That missing 20% still counts as taxable income, possibly with a penalty on top, unless you cover it out of your own pocket when you deposit the rest. Most people don't find out that's how it works until a tax form shows up the following January.

If the check is made payable to your new custodian instead ("Fidelity FBO Jane Doe," say), none of that happens. No withholding, no shortfall, no surprise. It doesn't even matter if the plan mails it to your house first and you're the one dropping it off.

My tongue-in-cheek rule of thumb: if you could take that check to a car dealership and drive off in something new, it's a distribution. If the only thing you can do with it is forward it, unopened in spirit, to your custodian, you're in the clear.

So when you're moving money from an old employer plan, say this sentence: "Please make the check payable to [new custodian], FBO [your name]." That one line is the difference between a clean move and an unplanned tax bill.

08/12/2026

Here's a distinction that trips people up: the "you can only do one rollover a year" rule everyone half-remembers only applies to IRA-to-IRA 60-day rollovers (employer plans like 401(k)s play by their own rules). And it's a 12-month window, not a calendar year — a distinction that matters more than it should. The clock starts when you receive the first distribution, and it applies across every IRA you own, combined.

Here's where people get in trouble. You take a distribution, roll it back within 60 days — fine, that's your one for the year. A few months later, for whatever reason, you take another distribution and try to roll that one back too. That second rollover isn't saved by moving fast. It's disallowed outright — and unlike a missed 60-day deadline, the IRS can't waive this one. Put the money back into a traditional IRA anyway, and you may have just created an excess contribution on top of a taxable distribution.

What many people don't know may save you, though. Roth conversions don't count against that limit. So if you've already used your one rollover for the year, one possible way out is to send that second distribution into a Roth instead. You'll owe ordinary income tax on it, same as any conversion. But a properly completed conversion isn't subject to the 10% early-distribution penalty, even under 59½. (Two catches: an RMD can't be converted, and each conversion starts its own five-year clock. Pull that specific money back out too soon, and the penalty can resurface. Neither changes the headline.)

One more wrinkle: none of this applies to inherited IRAs. Spouses get more flexibility if it's their own spouse's IRA. For everyone else, and even for spouses in inherited-from-someone-else situations, once money actually leaves an inherited IRA, there's not a damn thing you can do about it. No 60-day window, no conversion escape hatch, no do-over.

Because apparently "60-day rollover" wasn't complicated enough already.

08/07/2026

We know many people ask if they need a retirement income advisor. We propose different questions:

08/06/2026

Retirement planning is about your future, not about what you did or didn't do in the past