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Question Re Consolidating Retirement Accounts
Old 09-20-2019, 05:03 PM   #1
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Question Re Consolidating Retirement Accounts

Hello,

My wife is very close to retirement and she asked me the following questions. Since I have no clue how to answer them I thought I would ask here.

My wife has been in the same job for 34 years. Early in her career a financial advisor established a 403(b) and a Tax Sheltered Annuity for her. She contributed to those accounts for years. During this time the financial advisor passed away.

In 2008, while still working in the same place, another financial advisor established a 401(k) for her. She stopped her contributions to the 403(b) and the TSA, and started contributing to the 401(k). The other two accounts remained active. I'm not sure if it rolling them over was ever considered, but it didn't happen. The second financial advisor is also out of the picture.

As she gets closer to retirement my wife would like to consolidate the three accounts into one. Her goal is ease of management and establishing one place to draw from. She would prefer to keep the 401(k) or roll all three accounts into a new IRA. She will be 59 years and 4 months old when she retires.

The only other consideration is that when she retires here employer will be providing her with a large lump sum payment that can be directly rolled over into a an eligible retirement plan as defined in s. 402(c)(8)(B) of the Internal Revenue Code.

She does not plan to make withdrawals of any kind until she turns 59 1/2.

Questions:

1. Can she directly rollover the 403(b) and TSA into the 401(k) before she retires and before she turns 59 1/2 (meaning now) without penalties aside from rollover fees should they apply?

2. If she chooses to keep the three accounts active until she retires in 18 months will she be able to roll all three (once the lump sum payment is made) into a new IRA without penalty despite the fact that she has not turned 59 1/2?

Thank you!
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Old 09-20-2019, 07:21 PM   #2
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Quote:
Originally Posted by RF954 View Post
............

1. Can she directly rollover the 403(b) and TSA into the 401(k) before she retires and before she turns 59 1/2 (meaning now) without penalties aside from rollover fees should they apply?
No penalties, but it is up to the rules of that particular employer whether the other accounts can be rolled in

Quote:
2. If she chooses to keep the three accounts active until she retires in 18 months will she be able to roll all three (once the lump sum payment is made) into a new IRA without penalty despite the fact that she has not turned 59 1/2?

Thank you!
Yes, she can roll them over before she is 59 1/2 without penalty.
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Old 09-20-2019, 08:56 PM   #3
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Your favorite brokerage should be able to help with the rollovers. Particularly with so many different types. They should be pretty helpful with the prospect of bringing all that accumulated value to their brokerage.
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Old 09-21-2019, 06:20 AM   #4
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The brokerage(Vanguard, Fidelity, Schwab) will be able to assist you in creating an IRA and transferring the assets from each tax deferred vehicle into the IRA. It is a great way to simplify before RMDs hit in 10 years or so.

Good luck to her on her retirement!!

VW
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Old 09-23-2019, 12:22 PM   #5
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All the major brokerages will be more than happy to assist in rolling over those funds into their business. Should be easy peasy.
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Old 09-23-2019, 02:12 PM   #6
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Good luck rolling that 403B plan over. I've tried to do this, but didn't make the effort to complete the 17 page form that required some notary stamps.
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