rollovers

Rollover refers to the process of extending, renewing, or transferring a position or asset from one period, contract, or account to another, typically to maintain exposure, avoid penalties, or preserve a tax-advantaged status. The term is used in several contexts, with financial markets and retirement planning being among the most common.

In investments and banking, a rollover describes reinvesting funds from a maturing instrument into a new one with similar terms, such as rolling over a certificate of deposit into a new CD, or funding a new investment with the proceeds of a maturing security. Rollover transactions are often used to maintain a consistent investment strategy or to avoid realizing a gain or loss.

In retirement plans, a rollover involves transferring distributions from a qualified plan or IRA to another qualified plan or IRA, rather than taking a cash distribution. A direct rollover moves funds straight between accounts and generally avoids withholding taxes; an indirect rollover provides a check to the recipient with taxes withheld, requiring redeposit within a time limit to avoid taxes and penalties. Rules and limits apply, including timing requirements and annual restrictions on rollovers in some accounts.

In futures and options markets, a rollover refers to transitioning from one contract month to a later one to maintain a continuous position. The price difference between contracts, known as the roll yield, can add or subtract from returns.

In web design, rollover describes an interaction where an element responds to the cursor being over it, for example by changing color or revealing a submenu.

Rollover risk is the risk that new funding, refinancing, or replacement investments cannot be obtained on favorable terms when an existing obligation matures.