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Old 403b...what to do

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  • Old 403b...what to do

    I have an old 403b from residency.  There is not much money involved ~2500 however it is just sitting in a Fidelity account and I no longer am able to add money to the 403b.  I am looking for recommendations so that I don't have a small account out there to keep track of.  I have a 401k with my current job, can I / should I roll over the 403b into the 401k or are there more interesting ideas on what to do with this old account?

  • #2
    You can "roll over" 401k or 403b funds into a "rollover IRA". That basically means you own it, and it was never an employer account.

    While you don't have to roll things over, I have for simplicity. We have all previous 401k and 403b's rolled over into our rollover accounts. Mostly just for simplicity. Where is your 401k now? Perhaps roll it over there (read: create a "rollover ira" at the current place, then complete the rollover paperwork). If I recall, you may even be able to add to your current work plan. (might be employer specific).

     

    Some other thoughts: Do you have other 401ks/403bs from earlier in life you can roll over too? Consider using these funds for a backdoor Roth IRA. Also, at a place like Fidelity, you can put your funds into anything (etfs, index funds, bonds, stocks, money market, etc). One previous 401k had only very limited (12) options, all had high costs. So, make sure you check before you move. Some hassle might be worth it.

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    • #3
      If you current 401(k) accepts incoming transfers of other retirement plans, that could be one option. However, unless your current 401(k) has great investment options and low expenses, rolling this account into a Rollover IRA may be a better option. This will give you total control over the investment choices and expenses of the account.

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      • #4
        If you roll it out to an IRA, you will be prohibited from using the backdoor Roth IRA maneuver, tax free, in the future. Either roll it out to an IRA and pay the taxes on $2,500 of income or roll it into your current employer plan if the plan accepts incoming rollovers. Read your SPD (Summary Plan Description) to find out.
        Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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        • #5
          Depends on the fees in your old account.  If they are low, I would leave it unless you have some 1099 income.  Then you could start solo 401k to roll it into (just assuming your current 401k does not accept rollovers).  IRA as mentioned would prevent you from using backdoor ROTH.

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          • #6
            I love my old 403b!  I just have it in a vanguard stock index fund and there isn't really anything to keep track of.  I check it a couple times a year just to smile at the money I was able to sock away as a resident!

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            • #7




              I have an old 403b from residency.  There is not much money involved ~2500 however it is just sitting in a Fidelity account and I no longer am able to add money to the 403b.  I am looking for recommendations so that I don’t have a small account out there to keep track of.  I have a 401k with my current job, can I / should I roll over the 403b into the 401k or are there more interesting ideas on what to do with this old account?
              Click to expand...



              1. If fees/options are good: leave it

              2. Roll it into 401(k) if it accepts incoming rollovers

              3. Roll it into IRA and convert to Roth (will pay taxes on the conversion)


              Any of the above are fine options.

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