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401a to 457b rollover question

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  • 401a to 457b rollover question

    Hi guys,

    Upcoming grad who has found these blogs and forums extremely helpful.

    I was hoping for help with the following:

    My wife and I are finishing our training at a state university and have some savings in a 401a.  For a few reasons, the money that is in these accounts will be more valuable to us now than rolling them into a plan with our new employers.  I'm trying to avoid the 10% penalty for withdrawal if at all possible.

    My employer also offers a 457b and allows me to rollover my 401a contributions to the 457b.  Am I wrong in thinking I can roll the money from the 401a into the 457b and then withdrawal that after we graduate in July and no longer work for the university without paying the 10% penalty?

     

    Thanks for your help.

  • #2
    Nice idea and good question! However, a 457b is required to record rollover assets separately so they will continue to be subject to the 10% penalty on early withdrawal.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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