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 our PFA (that's personal finance area).