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Author: boxout Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19222  
Subject: Re: 457 plans rollover to IRA Date: 8/15/2001 8:10 PM
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This question has been out there for a while. Does anybody have any answers. My understanding is that 457 plans can now be rolled to IRAs, but I would like to know if there are any special rules (like there is ever anything that doesn't have special rules).

Specifically: I am planning on retiring at the end of December. I will need to make my 457 election (within 60 days I think). Will rolling to an IRA be an option? If so, it seems like that would be better than leaving it in the 457 plan. My understandingg is that from an IRA I could gradually shift (at least part of) the balance into a Roth IRA, paying taxes on what I shift as I go along. If I later withdraw the balance, or (more likely) die and leave it to my kids, the Roth portion would be tax free. Otherwise it would be a (high tax bracket) lump sum distribution. My understanding is that in addition to whatever advantages the Roth IRA might have, all IRAs have more flexibility with regard to withdrawals than 457 plans (e.g. you can withdraw a larger than normal amount at any time, and maybe a smaller than normal amount in some years).

So the real question is will I be able to roll the 457 plan to an IRA, but I'd also be interested in IRA versus 457 plan thoughts.

P.S. I will be 58 1/2 when I retire, but I guess if I want to withdraw some money in 2002, I could leave that much in the 457 plan or take a partial lump sum distribution in that amount.
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