Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev Thread | Next Thread
Author: dtelep One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121565  
Subject: 403b to Roth IRA - Is it possible? Date: 5/16/2001 8:47 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
A couple of weeks ago, I posted a note asking if a 403b to Roth IRA conversion was possible. Some of you replied that it was possible but needed to be done in a couple of steps - namely convert the 403b to a traditional IRA and then to a Roth after paying taxes on the gain.

I then heard from some other folks that this is only possible if I have either 1) reached retirement age, or 2)ended my employment with the company who sponsers the 403b plan. Neither of which is the case.

The bottom line is that I would like to move some money that I have in the 403b into an account that I can self manage. Is there ANY way to do it without incurring a penalty for an early distribution?

Any help would be greatly appreciated.

David
Print the post Back To Top
Author: Dallas22 One star, 50 posts 10+ Year Anniversary! Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 51032 of 121565
Subject: Re: 403b to Roth IRA - Is it possible? Date: 5/16/2001 10:44 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
<<A couple of weeks ago, I posted a note asking if a 403b to Roth IRA conversion was possible. Some of you replied that it was possible but needed to be done in a couple of steps - namely convert the 403b to a traditional IRA and then to a Roth after paying taxes on the gain.

I then heard from some other folks that this is only possible if I have either 1) reached retirement age, or 2)ended my employment with the company who sponsers the 403b plan. Neither of which is the case.

The bottom line is that I would like to move some money that I have in the 403b into an account that I can self manage. Is there ANY way to do it without incurring a penalty for an early distribution?>>>

My understanding is that if you still work for the company you can not roll it over to an IRA. You must either be separated from service, be disabled,or age 59 1/2. Somebody might correct me but if you are 59 1/2 you take a distribution and pay the tax on it. Then you can only put $2000 in the IRA. Even if you are 59 1/2 and you still work for the company there is no way to do a rollover. As far as I know, short of leaving your job (some have done it) there is no way to rollover the entire amount.


Print the post Back To Top
Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 51039 of 121565
Subject: Re: 403b to Roth IRA - Is it possible? Date: 5/17/2001 9:01 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
The bottom line is that I would like to move some money that I have in the 403b into an account that I can self manage. Is there ANY way to do it without incurring a penalty for an early distribution?

If you can get it out of the 403(b), yes. That's the real issue, and only your plan documents or administrator can answer it for you.

Phil Marti

Print the post Back To Top
Author: dtelep One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 51042 of 121565
Subject: Re: 403b to Roth IRA - Is it possible? Date: 5/17/2001 12:49 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
If you can get it out of the 403(b), yes. That's the real issue, and only your plan documents or administrator can answer it for you.


Thanks for your reply Phil,

Sounds like there is some variablity between plans. From what you are saying, 403(b)'s are not all one animal and that some plans may allow for an IRA conversion. If Vangaurd is my custodian, are you suggesting that I contact them? I'm not sure if the phrase administrator and custodian are the same.

David


Print the post Back To Top
Author: Mark0Young Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 51062 of 121565
Subject: Re: 403b to Roth IRA - Is it possible? Date: 5/18/2001 2:50 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
From what you are saying, 403(b)'s are not all one animal and that some plans may allow for an IRA conversion. If Vangaurd is my custodian, are you suggesting that I contact them?

No, Vanguard wouldn't know the contract you have for the 403(b). The question should go to your 403(b) administrator.


Print the post Back To Top
Author: dtelep One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 51063 of 121565
Subject: Re: 403b to Roth IRA - Is it possible? Date: 5/18/2001 6:29 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
From what you are saying, 403(b)'s are not all one animal and that some plans may allow for an IRA conversion. If Vangaurd is my custodian, are you suggesting that I contact them?

No, Vanguard wouldn't know the contract you have for the 403(b). The question should go to your 403(b) administrator.


I'm confused. Who is the administrator? My employer is a Board of Education. They forward money from payroll deductions to a company called Financial Services who offer their own annuity program or, as an alternative, funnel the money into no load funds such as Vangaurd. Would Financial Services be the administator?

David

Print the post Back To Top
Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 51065 of 121565
Subject: Re: 403b to Roth IRA - Is it possible? Date: 5/18/2001 8:32 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 1
If Vangaurd is my custodian, are you suggesting that I contact them? I'm not sure if the phrase administrator and custodian are the same.

No, they're not. There should be someone in HR at your employer who can answer questions about the plan. That's who you need to find.

Phil Marti

Print the post Back To Top
Author: peppermintpatty Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 51085 of 121565
Subject: Re: 403b to Roth IRA - Is it possible? Date: 5/19/2001 7:48 AM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
David -

It's easy to be confused - with tax regulations, etc. Go to www.irs.gov and search "Forms & Publications". Download & read a copy of Publication 571. You'll find that you do NOT have the ablility to move 403b/403b(7) money out of its format & into an IRA until you have terminated your employment with that employer! If you change school districts you could rollover the old 403b money into an IRA and start a new 403b plan at the new school district. But if you remain with the same employer you must keep 403b money in a 403b program (although you can transfer funds from one custodian to another!)

Hope this helps. Regards, PP

Print the post Back To Top
UnThreaded | Threaded | Whole Thread (8) | Ignore Thread Prev Thread | Next Thread
Advertisement