Let us first understand the need for rollover of retirement plans. When you withdraw from retirement plan ,you are liable to be taxed on the amount of withdrawal .You may also be subject to additional tax unless you’re eligible for one of the exceptions to the 10% additional tax on early distributions. So how do you prevent taxation of lumpsum payment from retirement plans as your actual retirement is away for some years.You transfer the amount to another retirement plan. In other words , when rollover the lumpsum to another IRA account , your tax-deferred status of your retirement assets remains same