transfer old 457 into old 401a or try opening solo 401k to roll both into?

[billy]

HI,

I am trying to simplify my portfolio, and still have some old retirement accounts from previous jobs, specifically a NYS 457 deferred comp plan, which charges yearly aum fees (basically 100 per year), and a 401a (TIAA-Cref) with no account management fees and good index funds with low expense ratios.  I have separated from both of those jobs but left the money in the accounts.

This year I started doing online surveys, although I am not making a lot off of them (only expect to make like 100 dollars this year). I am maxing out all other available retirement avenues available to me currently.  My current employer's 401k is not the best but has a SP 500 index fund that's acceptable. I am wondering what to do with my old retirement accounts, and here are what I think my options are:

1- open up a solo 401k with fidelity, making employer contribution of basically 20 dollars from my online survey money. I guess I would need an EIN to do this. Then roll over my assets from the 457 plan and use Fidelity's index funds (I heard vanguard doesnt accept roll overs into solo 401k).  Then depending on costs consider doing the same with my TIAA-Cref funds. This would also allow me to place the albeit small amounts made from online surveys if I ever end up making more from them. Is there a minimum amount needed to open a solo 401k?  I cant see fidelity charging too much for this.

2- If allowed roll over my old 457 assets into my old 401a TIAA cref plan.  Can you roll over an old retirement account into another old retirement account if you are not currently making any contributions to it?

3- roll them over into my employers 401k-- unlikely due to lack of available good funds in that plan.

 

Thanks,

Billy

 

[jfoxcpacfp]

1. Go with this option (1) if you plan to continue with your survey "business". Whether there is a minimum is up to the custodian. I have no idea about Fidelity.


2. No, you will not be able to roll an account into an account left behind with an ex-employer.


3. See #1

[nachos31]

Can one even roll a 457 into a 403b/401k? I thought they could only potentially being rolled into other 457s and that too only sometimes depending on govt vs non govt and the particularities of each 457 in question.

[jfoxcpacfp]

nachos31 wrote:

Can one even roll a 457 into a 403b/401k? I thought they could only potentially being rolled into other 457s and that too only sometimes depending on govt vs non govt and the particularities of each 457 in question.

Click to expand...

His 457 is with NY state (unless NYS stands for something else) and is not the variety of which you speak.

[billy]

Yes the 457 is a new york state government plan, so it can be rolled over.  Too bad I cant roll it over into the TIAA cref, that would've been easy. I'm more worried about classifying such a small thing (online surveys) as a business (and not just other income) until I start making more money off of them.  Worst case I just roll over the 457 plan into my current 401k (ishares sp 500 and ishare mdiix international), keep the tiaa cref where it is, and re-adjust the rest of my portfolio to make my allocations work.

 

 

[spiritrider]

I disagree with WCI on this survey issue. $100 in surveys is "other income" and does not rise to the level of the section 401k definition of a self-employed individual having earned income in a trade or business.

I'm not saying the black helicopters and jack-booted thugs are coming for you if you do this. I just would be far more comfortable if I had enough self-employment income to file a Form 1040 Schedule SE in addition to a Form 1040 Schedule .C and actually paid SE taxes. This is $500+

[jfoxcpacfp]

spiritrider wrote:

I’m not saying the black helicopters and jack-booted thugs are coming for you if you do this. I just would be far more comfortable if I had enough self-employment income to file a Form 1040 Schedule SE in addition to a Form 1040 Schedule .C and actually paid SE taxes. This is $500+

Click to expand...

Small correction, it's $400+ but your point is well taken. I have discomfort with this "method" of setting up a solo-k, also, unless the surveys are an ongoing activity, as they are for some doc's.

[ldizzle]

I wanted to ask a question on this too. It's my understanding that a 457 is simply deferred compensation, essentially putting part of your salary, pretax in an investment account. If you want to pull it, there is no penalty or age restrictions, you only pay taxes. On the other hand a 401K and 403b is a retirement account with early withdrawal penalties and taxes. If that description is correct, what would be the benefit of rolling over a 457 into a 401K? It seems a no brainer to just leave it alone.

[jfoxcpacfp]

ldizzle wrote:

I wanted to ask a question on this too. It’s my understanding that a 457 is simply deferred compensation, essentially putting part of your salary, pretax in an investment account. If you want to pull it, there is no penalty or age restrictions, you only pay taxes. On the other hand a 401K and 403b is a retirement account with early withdrawal penalties and taxes. If that description is correct, what would be the benefit of rolling over a 457 into a 401K? It seems a no brainer to just leave it alone.

Click to expand...

You make a good point that hasn't been discussed. You're correct that the 10% penalty d/n apply to 457 distributions. For most, it is a moot point, as I have yet to run into a physician who plans to take early (pre-59.5) distributions from a retirement account, but I'm sure it isn't for all. So, if that choice is a consideration, then your decision comes down to:

• Leave your account behind subject to whatever fees and options are available from the prior employer, or


• Move your account in order to get personal control (presuming solo-k) and/or to simplify your portfolio and give up the opportunity to take pre-59.5 penalty-free distributions.

If the ability to get $$ out, penalty-free, before age 59.5 overrides any concern with possible limitations of the prior employer plan, then I agree, that is what you should lean toward.

[Hank]

If the 10% penalty is a concern, couldn't you do a series of substantially equal periodic payments? You might have to roll the 401(k) out to an IRA.

[jfoxcpacfp]

Hank wrote:

If the 10% penalty is a concern, couldn’t you do a series of substantially equal periodic payments? You might have to roll the 401(k) out to an IRA.

Click to expand...

SEPPs are also a possibility. Because of the constraints on them, very few ppl use except in unusual situations as you are locked in for a minimum of 5 years or until age 59.5, whichever comes later. I would hope any physician would have adequate savings not to have to resort to this method, but you never know...

[billy]

I basically want to move the 457 funds to simplify my portfolio and forgo the annual maintenance fees that the account charges.  Im not planning on using any of that money before retirement unless a very unusual situation occurs.

thanks for all your responses