Old 403b account

[Jeniel.Parmar]

Hi,

I have a 403b that im no longer able to contribute into since i have left that job. It has something like 14k in it. Should i keep it or convert to another account?

Many thanks!

[ENT Doc]

Look at fund options and expenses.  Might be worth keeping it invested there.  Alternatively you can roll it over to your current employer plan (assuming you have one and if they allow it) or a traditional IRA.  The latter approach doesn't allow for use of the funds before 59.5 simply for having left that job at 55 or older, but you can set up SEPPs to access funds earlier.  See:

https://www.thebalance.com/what-age-can-funds-be-withdrawn-from-401k-2388807

 

[jfoxcpacfp]

You have 6 choices:

• Roll into current employer’s plan (lose control of your funds until you separate from service or reach age 59.5 or older),


• Roll out into a Traditional IRA, or “TIRA” (cannot do tax-free back-door Roth IRAs as a result),


• Roll out into a Roth IRA (will pay taxes on the value of funds at time of rollver),


• Find a way to make some IC income and set up a solo-401k; roll into that (may be difficult to do but this is preferred),


• Leave where it is (still have no control over account and subject to prior employer’s plan),or


• Cash out and pay the taxes and penalties (least advantageous).

Your choice will depend upon the facts and circumstances. You might want to consult with a fee-only financial planner or your CPA before making a decision.

[spiritrider]

I would add a possible option to Johanna's first choice.

Even many plans that do not otherwise allow in-service rollovers < 59 1/2 do so for rollover contributions

It would be a good idea to determine that when you ask if they accept the rollover contributions in the first place

[bonebrokemefix]

Would the OP's 403B be treated like a 401K with respect to having a clean slate come 12/31 for backdoor roth?

[jfoxcpacfp]

bonebrokemefix wrote:

Would the OP’s 403B be treated like a 401K with respect to having a clean slate come 12/31 for backdoor roth?

Click to expand...

The 403b (or 401k) has no bearing on the pro-rata tax of a backdoor Roth, if that's what you're asking. The only accounts that matter are pre-tax IRAs (including SEPs and SIMPLEs).