Higher returns, more investment choices, lower fees — any or all of these could be reasons for rolling over your traditional individual retirement account (IRA) into a new IRA at a different financial institution.

But be forewarned. It’s possible to make mistakes that could saddle you with needless taxes and penalties.

Before you think about moving funds from one IRA to another, make sure you review the rollover rules and follow them exactly.

No Dawdling Allowed. You have 60 days from the time you receive funds from your current IRA to roll them over to a new IRA. If you don’t roll over the funds within the time limit, any taxable amounts must be included on your federal income-tax return for that year.

These funds will be treated as ordinary income and taxed at your current rate. You can ask the IRS for a waiver or an extension of the 60-day period if you won’t be able to complete the rollover within the allotted time.

Only Once a Year. You generally cannot roll over more than one distribution from the same IRA to another IRA within a one-year period. This rule doesn’t apply to rollovers from a traditional IRA to a Roth IRA.

The Right Stuff. To be tax free, a rollover from one IRA to another must consist of the same property. For example, you can’t use cash from an IRA distribution to purchase assets and then roll those assets over to the new IRA.

RMDs Come First. Required minimum distributions are not eligible for rollover. Take any scheduled RMDs from your IRA before rolling over funds into a new account.