9 common misconceptions about IRAs
You can borrow from your IRA
Unlike with 401(k) plans, IRA owners can't take loans from the IRA account. Some investors may be tempted to gamble with the 60-day rollover provision that allows you to have a check cut from your account and made payable to you when you transfer the account to another custodian. If you deposit the money back into an IRA within 60 days, then you're fine. Miss the deadline by even a day and you no longer have an IRA. In its place could be a whopper of a tax bill.
The best way to transfer money between custodians is known as a trustee-to-trustee transfer. That way, the money never leaves the safety of a tax-advantaged account.
"Every time the money is moved, you have to be careful because it's tax-deferred money. It's like a hot potato -- you move it, (but) you have to be careful," Slott says.