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One of my friends asked me if he can and should rollover his 403b account into a Roth IRA. I would appreciate it if anyone can answer this because I don't know the answers. Also, are there any penalties involved in rolling a 403b into a Roth IRA (assuming that one could do so in the first place....)

Thanks in advance for answering these questions.
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ingus1 -

You asked: "One of my friends asked me if he can and should rollover his 403b account into a Roth IRA. I would appreciate it if anyone can answer this because I don't know the answers. Also, are there any penalties involved in rolling a 403b into a Roth IRA (assuming that one could do so in the first place....)"

My reply: "Maybe." You haven't provided enough detail yet. Does your friend have an ERISA plan or not? Does his employer impose restrictions? Is he/she still employed at the same job? These are all important questions...

Regards, PP

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Greetings, Ingus1, and welcome. You wrote:

<<One of my friends asked me if he can and should rollover his 403b account into a Roth IRA. I would appreciate it if anyone can answer this because I don't know the answers. Also, are there any penalties involved in rolling a 403b into a Roth IRA (assuming that one could do so in the first place....)>>

If your friend is no longer employed in the job that provided the 403b, then chances are he can transfer the proceeds to a traditional IRA. He cannot transfer them to a Roth IRA first; however, once the money is in a traditional IRA it may be further transferred to a Roth. Whether he should do so or not is another matter entirely. For details, see my post on that issue at http://www.irs.ustreas.gov/prod/forms_pubs/index.html. As to leaving the money in the plan versus putting it in an IRA, that's contingent on how he would invest it in either vehicle. In terms of investment selections, certainly he will have a much broader choice in the IRA.

Regards..Pixy
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