Consolidate 403b

My daughter has two 403b at two hospitals where she used to work.
Can she consolidate them to a new 403b either at Fidelity or the 403b at her new employer ?

Thanks

second part of the question: Can she move the 403b to an IRA without paying tax
during the move ?

Hi bridgewater,

The option to accept a transfer is up to the receiving 401/403. Normally, they do accept transfers.

The 401/403 from a previous employer can be transferred to an IRA of the same type without any tax or penalty.

Traditional 401/403 to a traditional IRA.

Roth 401/403 to a Roth IRA.

If the 401/403 has both types, the respective pieces will be transferred to the appropriate account type.

Does that help you?

Gene
All holdings and some statistics on my Fool profile page
http://my.fool.com/profile/gdett2/info.aspx

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yes - thank for your quick reply

Definitely consolidate and I would personally choose Fidelity (or where ever you have your personal accounts) over new employer for two reasons. One, probably better/more investing options. Two, easier to keep track of things if all in one place.

JLC

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Can she consolidate them to a new 403b either at Fidelity or the 403b at her new employer ?

Only an employer can provide a 403(b), so she can’t open a ‘new 403(b) at Fidelity’. She can, however, move the 403(b)s to IRA(s) at Fidelity (or another broker). Whether it’s a Roth IRA or a Traditional IRA, or both, depends. If she had a Roth account in her 403(b), she would move those funds to a Roth IRA, and there would be no tax consequences. Any Traditional (pre-tax) money in her 403(b)s can be moved to a Traditional IRA without any tax consequences, or if she’s willing and able to pay the taxes for the conversion, she could move some/all of it to a Roth IRA.

As Gene already said, if her new employer’s 403(b) accepts rollovers from other 403(b)s, she can move the money to her new employer’s plan. That said, I would suggest that she look at what investment options and investment costs/fees are in the new employer’s plan vs. what they would be in an IRA. My guess is that the IRA will win on that comparison. I would also suggest that she look very closely at any fees she will have to pay to the prior 403(b)s if she moves the money from the prior 403(b) plans to an IRA or her new employer’s plan, and if there are ways to mitigate those fees.

AJ

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