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The rules governing retirement accounts can be so complex that they discourage many people from saving in the first place. Yet even if you do get over the hump and put together a retirement saving strategy, a whole other set of rules can make it harder than you'd think to move funds from one retirement account to another. If you want to open up a new retirement account and fund it with existing retirement savings, for example, then you'll probably end up needing to know what are known as the IRA rollover rules. Let's take a closer look at these rules and how they can help you get money to where it will work hardest for you.

2 ways to move your money
The first thing you need to understand about moving money from IRA to IRA or from a 401(k) to an IRA is the terminology that you'll see. Usually, you can get funds from one account to another either through a direct transfer or via a rollover.

A direct transfer is the simplest way to take money from one retirement account and move it into another retirement account. With a direct transfer, you never have any control of the money. Instead, it goes directly from your current financial institution to the institution where you're opening the new account. Because you never actually touch the money, the IRS puts almost no limits on direct transfers.

On the other hand, a rollover between two IRAs often involves you getting a distribution from the first IRA and then having the responsibility to deposit it into the second IRA. Under the IRA rollover rules, you have 60 days from the date that you receive a retirement account distribution to deposit the money into the other IRA. If you don't, then the distribution is treated as taxable, and you lose the ability to put it back into a retirement account.

Another complication with rollovers is that you'll typically have taxes withheld from the initial retirement-plan distribution. Mandatory withholding now imposes a 20% tax on distributions from retirement plans, while IRA distributions are subject to a voluntary 10% withholding tax that you can opt out of if you wish. If taxes are withheld, then in order to complete the rollover, you'll have to cover the difference from your own funds, only getting back the withheld tax amount when you file your return for the year.

Rollovers aren't available for every type of IRA distribution. The most important rule is that required minimum distributions from IRAs aren't eligible for rollover treatment. With 401(k)s and other workplace plans, several other kinds of distributions also don't qualify for rollover tax treatment, including hardship distributions, loans treated as a distribution, or distributions made as part of a series of substantially equal payments.

The newest IRA rollover rule
A recent court case imposed a brand new rule on IRA rollovers, making them even less attractive. Beginning in 2015, you can only make one rollover from an IRA to another IRA every 12 months, even if you have multiple IRA accounts and the rollover involves only a small portion of your overall retirement assets. The impetus behind the new rule is an effort to prevent people from constantly withdrawing portions of their IRA money for 60-day periods and then redepositing those withdrawals with rolled-over funds from other retirement accounts.

Fortunately, it's pretty easy to comply with the new IRA rollover rule. The rule only applies to true rollovers; direct transfers between IRAs are exempt from the one-per-year limit. Moreover, rollovers between an IRA and a workplace retirement plan like a 401(k) aren't subject to the limitations.

In order to avoid the temptation of having retirement money in your hands even for a brief period, the smartest thing to do when moving money between different retirement accounts is to arrange to have your financial institutions make the transfer directly. Not only does that prevent you from making mistakes with your money, but it also ensures that you'll have the shortest possible gap during which your money isn't working for you. Otherwise, you'll have to be very careful to make sure your series of transactions complies with the IRA rollover rules to the letter.