403b and 457 rollover?

[FutureInternist]

Have some money in my current non-profit job’s 403b and 457.

Will be taking a for-profit job soon that has 401 k, no 457 (since for profit), but does have deferred compensation (perhaps a 457f??).

What are my options for this $?

From what I have read I can leave the 403b at the original job but must take out or rollover the 457

Thoughts?

Thanks.

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[ThoracicGuy]

You can roll it into your own traditional IRA, your new 401k, or if eligible, a solo 401k. I would try to avoid placing it in a traditional IRA as it can prohibit the backdoor Roth. You can leave it where it is, but it also depends on what funds you have access to. If your 457 is a governmental 457, it can be moved to 401ks. Nongovernmental 457s can only be moved to other nongovernmental 457s.

I would probably avoid the deferred compensation plan. You're betting your company you work for will be intact by the time you retire. If they go under, you would be considered an unsecured creditor and likely would lose that money.

 

[FutureInternist]

You can roll it into your own traditional IRA, your new 401k, or if eligible, a solo 401k. I would try to avoid placing it in a traditional IRA as it can prohibit the backdoor Roth. You can leave it where it is, but it also depends on what funds you have access to. If your 457 is a governmental 457, it can be moved to 401ks. Nongovernmental 457s can only be moved to other nongovernmental 457s.

I would probably avoid the deferred compensation plan. You're betting your company you work for will be intact by the time you retire. If they go under, you would be considered an unsecured creditor and likely would lose that money.

Thanks for the reply.

I have already maxed out my and spouse’s IRA (backdoor) for this year.

Seems like best option would be to put the 403b into the new job’s 401k.

The 457 is a non-gov, non- profit one and the new job doesn’t have one so may just have to liquidate that $.

 

[ThoracicGuy]

Thanks for the reply.

I have already maxed out my and spouse’s IRA (backdoor) for this year.

Seems like best option would be to put the 403b into the new job’s 401k.

The 457 is a non-gov, non- profit one and the new job doesn’t have one so may just have to liquidate that $.

Check and see, but I suspect you can get the 457 in your 401k. You might have to go to a tIRA and then to the 401k. I sent mine straight into my solo 401k.

 

[Sushirolls]

The only option for a non-governmental 457 is moving it into another non-governmental 457, getting cut a check. They'll likely take out a chunk of it for you in taxes once they disperse it to you. There is no other option. You cannot move that money into other 401/403/IRA accounts, etc


The real question is once you get that lump sum, what will you do with it?

 

[FutureInternist]

The only option for a non-governmental 457 is moving it into another non-governmental 457, getting cut a check. They'll likely take out a chunk of it for you in taxes once they disperse it to you. There is no other option. You cannot move that money into other 401/403/IRA accounts, etc


The real question is once you get that lump sum, what will you do with it?

Loans, loans and more loans to pay off :/

 

[NITRAS]

My 457b allows me to take it over 10 years. Not ideal, but better than nothing.

 

[Sushirolls]

My 457b allows me to take it over 10 years. Not ideal, but better than nothing.

Mine had the option I believe for lump sum vs multi year distribution. I'd hope you would have an option.

 

[FutureInternist]

Mine had the option I believe for lump sum vs multi year distribution. I'd hope you would have an option.

I may opt for the full sum just to be done with it.
Perhaps it makes more sense to take it at the beginning of 2020, since I will be working part time and hence overall income will be lower so even the lump sum won’t propel be into next tax bracket, whereas since I already worked most of the year at a higher income, if I take it now, more of it will go to taxes?

 

[Sushirolls]

I may opt for the full sum just to be done with it.
Perhaps it makes more sense to take it at the beginning of 2020, since I will be working part time and hence overall income will be lower so even the lump sum won’t propel be into next tax bracket, whereas since I already worked most of the year at a higher income, if I take it now, more of it will go to taxes?

Take it when ever it works best for you, but remember also that money in 457 funds is money that your former employer can steal to pay their debts. In other words if/when they go bankrupt these accounts get raided to pay of their creditors. Personally, I don't want to risk such a fiasco knowing how ridiculous hospital administrators are with their ability to run a hospital or Big Box Shop health systems.