In Trillion-Dollar Treasure Trove, you talk about rolling over 401(k) accounts from former employers into a current employer's plan. Can you do the same thing with a 403(b) account? -- Dorothy
To answer your question, I turn to occasional Fool contributor Dan Otter, who runs the wonderful site for teachers and employees of non-profit organizations, 403bwise.com. He offers an English translation of the Economic Growth and Tax Relief Reconciliation Act of 2001, which increased contribution limits and eliminated the maximum exclusion allowance. (Yeah, I know... riveting reading, eh?)
But force yourself to plod on. Part of the act directly applies to 403(b) investors like you. Those who want to take the money with them to a new employer can do so if three conditions are met:
- The person must be a participant in the 401(k) plan.
- The 401(k) plan must accept rollovers.
- There must be an event that permits a distribution from the 403(b) plan. Qualifying events that trigger distributions from a 403(b) plan include death, disability, severance of employment, and reaching age 59 1/2.
A 401(k) can also be rolled into a 403(b). However, not all plans allow such transfers, so check with your employer.
This is one of those administrative money tasks that requires a bit of homework. But it's nothing more than contacting your old plan administrator and getting the proper paperwork from your new one. I encourage you to put it on your to-do list. Who knows? Maybe you'll find yourself flipping through the tax code for your leisure reading.
For more on 401(k)s, 403(b)s, IRAs, TGIFs, and PDQs, visit ourPFA(that's personal finance area).