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Author: wic770 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 25214  
Subject: 403b rollover Date: 7/27/2010 1:24 PM
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I have read that you are only allowed to make one rollover from an IRA to another IRA in a 12 month period. Does that apply to rollovers from a 403b to an IRA too? Unaware of that restriction I made a parital rollover from my 403b to an IRA and planned to rollover the remainder of the 403b to a second IRA. Can I do that without incurring a penalty?
Thanks, Bill
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Author: Fuskie Big funky green star, 20000 posts Top Favorite Fools Old School Fool Ticker Guide SC1 Red Winner of the 2010 Rule Breakers Challenge Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 24537 of 25214
Subject: Re: 403b rollover Date: 7/27/2010 1:39 PM
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From Investopedia.com:

Within one year after you distribute assets from your IRA and rollover any part of that amount, you cannot make another rollover from the same IRA to another (or the same) IRA.

For example, imagine that you have two IRAs - IRA-1 and IRA-2 - and you make a tax-free rollover from IRA-1 into a new IRA (IRA-3).

Within one year of the distribution from IRA-1, you cannot make another tax-free rollover from IRA-1 or from IRA-3 into another IRA. However, you could roll funds out of IRA-2 into any other IRA because you did not roll money into or out of that account within the previous year.

The once-a-year limit on IRA-to-IRA rollovers does not apply to eligible rollover distributions from an employer plan. Therefore, you can roll over more than one distribution from the same qualified plan, 403(b) or 457(b) account within a year. (Note: This one year limit does not apply to rollovers from Traditional IRAs to Roth IRAs, i.e. Roth conversions.)

http://www.investopedia.com/articles/retirement/06/rolloverm...

Fuskie
Who thinks based on his reading of this thinks you should be OK...

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Author: wic770 Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 24541 of 25214
Subject: Re: 403b rollover Date: 7/27/2010 6:31 PM
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Thanks for the response. I had seen the first part of that article about the IRAs but I missed the section regarding the exemption for a 403b. That answers my question. Thanks again.
Bill

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Author: BruceCM Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 24544 of 25214
Subject: Re: 403b rollover Date: 7/28/2010 11:54 AM
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What kind of rollover?

If this is a direct rollover, or sometimes referred to as an 'agent-to-agent' rollover, there is no limit on the number of times this can be done per account per year.

If you are speaking of an indirect rollover, or sometimes called a 'distribution rollover', where the distribution is coming directly to you, and you have 60 days to put the distribution back into an IRA or another retirement plan, then you are limited to one of these per account in each 12 month period (not per year), beginning with the date of the distribution.

Indirect rollovers from retirement plans is always a bad idea, as the employer is required to withhold 20% of the distribution (sending it to the IRS), and when you redeposit the rollover into your IRA, you must make up the 20% withholding out of your pocket, or it will be considered by the IRS to be a taxable distribution that also may be subject to a 10% penalty if you are not yet 59.5. If you fully deposit the rollover within the 60 days, you then claim the 20% withholding on your tax return next year as a credit.

BruceM

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