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<<Rest easy, Roger. As part of the Taxpayer Relief Act of 1997, Congress repealed the excess distributions tax and the excess accumulations tax in their entirety. You are free to take as much as you want from the 403b as long as you pay ordinary income tax on that sum when you do.

As to the Roth, any money (rollover or annual contribution) that goes into it is taxed before it's deposited. While there, the earnings on those sums grow tax free. When the money comes out, it is all tax free. It does not have to come out at age 70 1/2. And it is not subject to income tax by your heirs should you die. It could, though, be subject to estate tax if it exceeds the unified credit level in effect in the year of death.

And BTW, retirement plan monies may not be rolled to a Roth. It's a quirk in the law. They can only be rolled to a regular IRA. Once there, though, that IRA can be rolled to a Roth provided all taxes due are paid. Do so in 1998, and you have four years to pay the taxes due. In 1999 and later, the taxes are due in total in the year of the rollovert o the Roth.>>

Thank you. That's the best news I've ever heard on taxes. I just hope those penalties won't be back. I also appreciate the detail on rolling the IRA over in 1998 to spread the taxes.
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