In an individual retirement account (IRA), what is true regarding rollover contributions?

In the context of individual retirement accounts (IRAs), rollover contributions represent a unique provision that allows individuals to transfer funds from one retirement account to another. The significant aspect of rollover contributions is that they are not subject to the annual contribution limits that typically apply to regular IRA contributions. This means that individuals can deposit an entire amount transferred from another qualified retirement plan or IRA without worrying about exceeding the annual cap set by the IRS for regular contributions.

This feature is beneficial for individuals who may have accumulated a substantial sum in another retirement account and wish to consolidate their retirement savings into a single IRA. By allowing rollover contributions to exceed standard contribution limits, the IRA facilitates seamless transitions and encourages better management of retirement assets, enabling individuals to take full advantage of the tax-deferred growth potential.

The other options mention restrictions or requirements that do not apply to rollover contributions in the same manner, thus highlighting the unique flexibility that rollover options provide within retirement planning.