Transfer 403b At Retirement?

[yakers]

My wife intends to retire from teaching this spring. What are the mechanics of transferring a 403b account at the time of retirement? As I read the literature this is one of the events that allow such a transfer but this is not a 90-24 transfer. It would be from an insurance company (Nationwide) directly to Vanguard. And it would be from a 403b to a Traditional IRA. I don't know if the request can be initiated before the date of retirement but I didn't want to be caught out by not having requested something that should have been started earlier.

[cute fuzzy bunny]

You have to read the "contract" issued by the 403b provider, there is some variability.

The rules on my wifes one should at least be similar and give you some idea of what to look for.

- You cant roll it over until she no longer works there
- There is a 'surrender charge' or 'surrender value' thats lower than the actual value...they take a little chunk as a pseudo penalty. I'd have to go look at her contract to see what the percentage is exactly, but its about 10%.
- You have to either accept the continuance of the contract and its eventual payment or the lump sum 'surrender' within a certain period of time, I think in her case its 90 days.

My dad had the same thing with his plan from Tufts when he stopped teaching. Changed his mind about the payment vs lump sum thing some years later and it appeared there was no way to reverse that decision.

[grumpy]

yakers,

When my wife retired from teaching I just called Vanguard. They sent us some forms to complete to roll the 403(b) account to a rollover IRA. We filled out the forms and sent them back and Vanguard took care of the rest. Took a couple of weeks to get it all completed but there were no problems. It may have helped that we are Voyager level with Vanguard due to the size of our other accounts.

Grumpy

[education]

Hey Grumpy--

Professor here. I have my retirement plans with Fidelity and am thinking of switching to Vanguard on retirement. What is this Voyager level and what is the amount needed to reach this?

thanks for the info.

[cute fuzzy bunny]

You need 250k to qualify for voyager, where you get a smaller, better customer service team that helps a bit more, and some fees are waived or reduced. A million gets you flagship service, where you get a named rep, most fees are waived, you get some free brokerage trades with them every year, and they fill out a lot of the forms for you and just send them over to be signed.

[grumpy]

Professor,

Yep, CFB got it right.

Grumpy

[mickeyd]

Hey Yakers,

Quote:

As I read the literature this is one of the events that allow such a transfer but this is not a 90-24 transfer. It would be from an insurance company (Nationwide) directly to Vanguard.

You do not say so in your post, but is your wife 403B in an annuity with Nationwide or is it in a mutual fund?

I agree that any one at Vanguard can assist you in getting it moved over to them as they do it a thousand times a day and have a pretty efficient process. The only delay could be in getting the money released by Nationwide is that these companies sometime take it personally when your switch allegance to Vanguard and drag their feet and ask for "one more form for her to sign" etc.

[ats5g]

Check out Distributions and Rollovers of Publication 571. As CFB said, read the contract with Nationwide or the Summary Plan Description. Some 403(b)'s accounts have surrender charges that get smaller as time passes, and some just royally screw you.

- Alec

[Nords]

Quote:

Originally Posted by mickeyd The only delay could be in getting the money released by Nationwide is that these companies sometime take it personally when your switch allegance to Vanguard and drag their feet and ask for "one more form for her to sign" etc.

I experienced this type of foot-dragging when switching from custodian to another. When the request originates from the new custodian, not from you, then the foot-dragging stops.

Apparently the custodians don't mind wasting your time, but they don't try to do it with each other.