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Rollover 403b to IRA
Old 11-11-2015, 04:15 PM   #1
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Rollover 403b to IRA

I retired several years ago and left my 403b in tact with my previous employer. I'm 58 and have not begun any withdrawals yet. My question is should I rollover my 403b to an IRA? What might be the advantages or disadvantages? I've left it in place mostly due to inertia.


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Old 11-11-2015, 04:42 PM   #2
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I just moved my wife's 403b to an ira because of the high fees; didn't need any other reason.

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Old 11-11-2015, 04:47 PM   #3
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Does the 403(b) offer a stable interest fund? These can provide better low risk returns than bonds and are not available in an IRA. Other advantages to a 403(b) - withdrawals at age 55 vs 59 1/2 and greater shielding from lawsuits, depending on your state.
You probably mean principal not principle. Judgment only has one "e".
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Old 11-11-2015, 04:57 PM   #4
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I had two 403(b) plans from the same employer. One was a traditional (tax-deferred) plan, the other a Roth 403(b) that became available much later, I think in 2008. Once it became available, I stopped all contributions to the traditional in favor of the Roth.

After I left, at some point I converted the traditional in its entirety to a traditional IRA. I left the Roth 403(b) in place. I'd been doing some shifting of investments this year among plans (I also have a 457 plan) and realized that the Roth 403(b) offered some share classes (institutional) that were not available in the traditional IRA (both are with Fidelity). The expenses can be quite a bit lower for the institutional ("K class") funds, so I'll stay with that.

It happens that the Fidelity fund choices available to us were quite a few, so the common problem of lousy investment selections in an employer plan wasn't an issue for me.

I also keep the 457 as it was, and a big reason for that is that it offers a stable value fund, which is not available to me elsewhere.

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Old 11-11-2015, 06:59 PM   #5
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typically the reasons to roll over are either fees or limited fund choices. A rollover allows you to choose any investment you want and manage the fees. If you have good fund choices at a reasonable cost, you may just want to stay where you are. +1 regarding Travelover's comment on stable value funds. Can't find these in a rollover IRA so if you have access to one of these it may be worth sticking around longer.
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Old 11-12-2015, 05:43 AM   #6
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Your decision also depends what your 403b plan is invested in. For many, it's an annuity. Annuities don't give you much flexibility and the fees are typically much higher that mutual funds.
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Old 11-12-2015, 06:39 AM   #7
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My wife 55 at the time she retired had a 403b that we rolled over to an IRA due to the fact she could make one withdraw penalty free but the plan forced you to vacate the 403b at time of said withdraw. The Rollover IRA gave us the opportunity to invest how we wanted to as in more choices as well as do Roth conversions. We do Roth conversions while we have low (no) earned income to avoid income tax and lower our mandatory withdraws later..
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Old 11-12-2015, 07:37 AM   #8
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My former employer's 401K had no fees and good investment choices so I stayed invested in it until last week when I was notified of changes affecting all of my investment choices. That's when I rolled it over to an IRA where I will decide on which funds to invest in and not the 401K committee.
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Old 11-12-2015, 10:06 AM   #9
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Thanks to all for your inputs. My 403b has low fees and a wide range of investment choices. I think I will rollover to an IRA to reduce paperwork for withdrawals and Roth conversions. I'm doing a Roth conversion now and I had to fill out paperwork for Fidelity, mail it to my former employer for approval, rollover to an IRA, and then convert to Roth. I plan to marry in a year or so and that would add a notarized signature from future wife.

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