Rolling a 401K over to a 403B

Ryan Pultz · 08-12-2008, 10:05 PM

so I might have a chance to change jobs I curantly have a 401k plan from my employer they match my contrabutuions the new company I hope to work with offers a 403b (its non for proffit) and I was wondering is it posable to roll the 401k over to the 403b or would I have to take the 401k and put it into IRA.

Also I did have to take a loan out of my 401k about a year ago if I pull the money out of the employee 401k what will happen there I think I still owe 900 bucks fro the loan will they just take that off of the 401k blanace I roll over? thanks for the info rp

Hare's Ear · 08-13-2008, 09:31 AM

You should read the 403b plan document to see if it allows rollovers, or ask the plan administrator.

If you don't pay back the $900 before the balance gets moved it will be treated as a taxable distribution to you and will be subject to income tax and the 10% penalty (assuming you are not yet 59 1/2 years old). The taxes and penalty will be less than $900.

FrogPond · 08-13-2008, 10:06 AM

For what it's worth...my wife tried to roll her 403b into a 401 and the company she was switching too (Vanguard, I think) said it was not allowed. She will need to set up an IRA...

goforchrome · 08-13-2008, 10:13 AM

Be very cautious re 403b.
Many school districts and healthcare orgs still allow TSA insurance vendors to hawk their products as an investment vehicle in 403b's.
These are probably THE WORST examples of predatory investment practices still allowed.
There is NO PRACTICAL ADVANTAGE to using a qualified annuity for in investor.
The fees and commissions generated are obscene.
Hopefully it is direct to a large mutual fund vendor like Vanguard, Fidelity or others that don't contract a local insurance agent or local administrator to layer on fees.
PM me, as I know this industry very well.
Prev post re taxes and penalties for unpaid loan bal was correct.
You are almost always better off in a ira with a low cost vendor when rolling over.

OutdoorBum · 08-13-2008, 10:49 AM

Quote:

Originally Posted by goforchrome

Be very cautious re 403b.
Many school districts and healthcare orgs still allow TSA insurance vendors to hawk their products as an investment vehicle in 403b's.
These are probably THE WORST examples of predatory investment practices still allowed.
There is NO PRACTICAL ADVANTAGE to using a qualified annuity for in investor.
The fees and commissions generated are obscene.
Hopefully it is direct to a large mutual fund vendor like Vanguard, Fidelity or others that don't contract a local insurance agent or local administrator to layer on fees.
PM me, as I know this industry very well.
Prev post re taxes and penalties for unpaid loan bal was correct.
You are almost always better off in a ira with a low cost vendor when rolling over.

Well said. I wouldn't roll to a 403(b) either for all the reasons mentioned. Roll to an IRA and increase your investment options...

Caspac · 08-13-2008, 10:54 AM

Most likely your current employers 401K plan will allow you to maintain your 401K account even while employed by another company. However this depends on your plan balance and procedures following termination as outlined in your 410K plan document.

Assuming you can maintain your 401K account, do so until your loan balance is paid off and then evaluate your options. When you have paid off the 401K loan balance your best option will likely be an IRA rollover. This depends on your age, estimated retirement date, 401K investment options, investment expenses, need to take loans, etc.

The non-profit will have a list of 403(b) vendors you can choose from. Take time to evaluate the vendors or speak with an advisor to outline the options for you. Depending on your situation you will likely want to participate in the 403(b) plan with the new employer. However, assuming you are married, maybe your spouse has an employer spsonsored plan that provides a better option for contributions, matching, investment options, etc.

There are many questions that you should have answers to before taking action. I know this is more information than you asked for but I work in the industry and see people make mistakes that come back to haunt them years down the road.

Good luck, PM me if you need more info.

OutdoorBum · 08-13-2008, 10:58 AM

And for the record...try not to take any more loans.

Geemo · 08-13-2008, 11:24 AM

CALL Snug 2!

Here's his info.
http://www.ifish.net/andrewlewis.html

Andrew has helped us prep for retirement. Give him a call and see what he can do for you and your family.

All the non-sense of 401-K.... 403-B... Blah... Blah... Blah... is still VERY confusing to me. Andrew has a way of explaining it so it makes sense.

Give him a call, set your mind at ease.

Geemo

garyk · 08-13-2008, 02:31 PM

Quote:

Originally Posted by Ryan Pultz

the new company I hope to work with offers a 403b (its non for proffit)

Just an FYI... there was a time when nonprofits couldn't offer 401k plans and thus were forced to go the 403b route.

That all changed years ago - like 1996 - and now nonprofits can and do offer 401k plans.