Retirement Accounts
An employee receives a distribution from their 401(k) and wants to roll it into an IRA. How many days do they have to complete the rollover to avoid taxes and penalties?
60-day rollover rule. Direct (trustee-to-trustee) rollovers avoid this deadline and withholding.
Complete Analysis & Legal Rationale
The IRS allows 60 days to complete an indirect rollover. If the funds are not deposited into another qualified retirement account within 60 days, the distribution is taxable and may be subject to a 10% early withdrawal penalty if under age 59 1/2.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.