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I think I understand that one cannot convert a 401(k) balance while still employed at the same employer, so is this a loophole that allows those working for not-for-profits to do just that? If so, doesn't really seem fair to me.

Since posting my questions I have found out that the same limitations apply to 403(b) plans as 401(k); I have to leave my 403(b) employer before I can complete the rollover of 403(b) assets into the IRA. I found this out when my 403(b) custodian returned my application for transfer, indicating that I needed to indicate the circumstances of my disbursement. Since I'm over 60, I could take the distribution (paying the taxes) but it couldn't be rolled over into the IRA.

However, when I retire in 3 years, I can accomplish the rollover at that time. Or, I could retire now and give up all of the extra contributions I could make in preparation for the rollover. Or I could leave my present employer (sacrificing the ability to contribute the long-term employee catchup amounts), do the rollover into the IRA, and then go back to work for another employer (or maybe even my current employer).

So many questions; so few answers (so far).
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