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I recently learned of the possibility of transferring funds from a 403(b) account to a 403(b)(7) account that I could open as an individual in a mutual fund of my own choosing if I don't like the 403(b) offerings I'm given (provided the mutual fund of my own choosing is equipped to do 403b7 accounts, and after I've checked my 403b plan to find out if there are any "surrender fees" if I make the transfer). I can do this while I am still working at my job, and without my employer's approval being necessary.

The 403(b)(7) can still only be invested in mutual funds. Does anyone know if it is possible to roll the 403(b)(7) account into an IRA while I still have the job so I could invest in stocks?

Thanks,
John
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Greetings, John, and welcome. You asked:

<<The 403(b)(7) can still only be invested in mutual funds. Does anyone know if it is possible to roll the 403(b)(7) account into an IRA while I still have the job so I could invest in stocks?>>

Nice try, but it definitely is NOT allowed while you are still employed in the job that offers the 403b plan. You'll have to wait until you leave that job to transfer the money to an IRA.

Regards..Pixy

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Nice try, but it definitely is NOT allowed while you are still employed in the job that offers the 403b plan. You'll have to wait until you leave that job to transfer the money to an IRA.

Also, be forewarned that you can't make loans against contributions to the 403(b)(7), unlike the straight 403(b).

-- Sweth.
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Actually you can roll over your 403b to an IRA if you are 59 1/2. I did it this year.
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TMF Pixy wrote:

Nice try, but it definitely is NOT allowed while you are still
employed in the job that offers the 403b plan. You'll have to wait
until you leave that job to transfer the money to an IRA.


Oh boy, Pixy! You've just given me one of the "ah hah!" moments :-)

My sister is a former teacher, now self-employed as an editor/writer. She still has an annuity sitting in a 403(b) account which she's in the process of cashing out. The insurance salesman who sold her the annuity in the first place has told her she CANNOT roll over those proceeds into her SEP-IRA or her Roth IRA, and now she's uncertain just what she can do with that money. Obviously she doesn't want to keep it in a 403(b) but it sounds as though she's being given wrong advice.

She's only in her 40s and would like this money invested in a tax-deferred account, preferably in a growth vehicle of her own choosing, such as an index fund.

Can you clarify?

Many thanks,

Jeanie
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Jeanie writes:

<<My sister is a former teacher, now self-employed as an editor/writer. She still has an annuity sitting in a 403(b) account which she's in the process of cashing out. The insurance salesman who sold her the annuity in the first place has told her she CANNOT roll over those proceeds into her SEP-IRA or her Roth IRA, and now she's uncertain just what she can do with that money. Obviously she doesn't want to keep it in a 403(b) but it sounds as though she's being given wrong advice.

She's only in her 40s and would like this money invested in a tax-deferred account, preferably in a growth vehicle of her own choosing, such as an index fund.

Can you clarify?>>


Aha! -- A lurker from within has spoken. :-)

A 403b is a different kind of animal because it can come in both qualified and unqualified form. Your sister's first step is to determine if her old 403b is a qualified retirement plan. Some are not, and when they are not, then the proceeds may not be transferred to an IRA under any circumstances. And even when qualified (and like your sister's plan) they are sometimes invested exclusively in annuities. Often, the annuity may not be surrendered all at once. Instead, it must be surrendered over a period of 10 years. If your sister has one of those, then each year she may transfer a little bit to an IRA. OTOH, if she's in a qualified plan and there are no such restrictions on her annuity, then she can simply surrender the annuity, pay any possible surrender fee, and transfer the net to an IRA.

You state that her insurance agent says she can't transfer the money. That leads me to believe she is in an unqualified 403b plan. Otherwise she should be able to transfer at least some of the money to an IRA.

Regards..Pixy
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Thank you, thank you, dear Pixy :-) Your explanations help a lot and are timely, too, since she's meeting with the insurance salesman today.

You mention:
if she's in a qualified plan and
there are no such restrictions on her annuity, then she can simply
surrender the annuity, pay any possible surrender fee, and transfer
the net to an IRA.


Although I'm not sure if it's a qualified or non-qualified plan, we do know that she may be able to surrender this annuity with no fees at all (again according to the salesman) because of outrageous mishandling by Conseco, the company who bought out the orig ins co that sold her the annuity.

We'll see. Thanks again,

Jeanie :)
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