Using an indirect rollover for a short-term IRA loan
You can't get an IRA loan, but you can make an indirect rollover. This is different from a direct rollover, where a distribution from a retirement plan is sent directly to another retirement account.
By contrast, an indirect rollover occurs when you receive a distribution from a retirement plan (in this case, an IRA). You're then responsible for depositing it into an IRA within 60 days. If you stick to that window, you won't incur an early withdrawal penalty, so this opens up the opportunity to borrow from an IRA on a short-term basis.
If you need money and know you'll be able to pay it back within 60 days, you can initiate an indirect rollover, use that money temporarily, and then pay it back to avoid a penalty. You don't even have to deposit the funds into a new IRA; you can stick them right back into your existing IRA.
You're limited to one IRA rollover per 12-month period, and the strategy does have risks. If you don't deposit the money back into an IRA within the 60-day time frame, the amount removed will be treated as a distribution, which means it will be subject to a 10% early withdrawal penalty. But if you just need a short, temporary influx of cash, using an indirect IRA rollover as a loan could work.
