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457b Rollover

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  • 457b Rollover

    Just finished residency and got kicked out of my governmental 457b plan. Did not get the notice to roll over internally so just got a check for the full amount minus 20% tax withholdings. Did some research and it looks like I can roll it over myself and put in the 20% taken out by prudential and will get that money back in a tax refund.

    Where is the best place to put this money? Since taxes are already taken out, is there someway to roll this over to a Roth and make it a post-tax contribution?

    Should I roll it over to a normal rollover 401k or should I put it into my individual 401K (I'm a new independent contractor and probably wont be able to hit the full limit given only half a year of attendinghood.)

    Thanks for the help!

  • #2
    www.irs.gov/pub/irs-tege/rollover_chart.pdf

    Looking at the chart above,  you have LOTS of choices.  If you have sufficient cash flow,  this year of 1/2 income-----> lower income tax rate,  would be ideal to place it in a Roth IRA.

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    • #3
      You keep saying "rollover." That refers to a specific concept in which you transfer assets from one account to another.

      Given that you've been written a check, are you sure that your account hasn't been liquidated and you're not just making a cash investment with the money that used to be in it?

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