The Internal Revenue Service (IRS) says you can roll a 澳洲幸运5官方开奖结果体彩网:403(b) plan into a 澳洲幸运5官方开奖结果体彩网:401(k) plan if you work for an employer that offers a 401(k). You can also roll a 403(b) plan into a solo or 澳洲幸运5官方开奖结果体彩网:independent 401(k) plan if you are self-employed.

However, if you work for an employer t🌳hat does not offer a 401(k) plan, then you cannot roll a 403(b) plan into any type of 401(k) plan.

Eligible Accounts for Rollovers

The funds within your 403(b) plan can be rolled over into a 401(k) plan with your current employer. You can also transfer the funds into a simplified employee pensionꦦ (SEP) ind﷽ividual retirement account (IRA) or 457 plan if your employer offers them. The rollover also works in reverse: If you had a 401(🐈k) at your old job and your new employer offers a 403(b), you can roll over part or all of those funds, too.

You can also roll over assets in a 403(b) or other qualified plan offered by a previous employer into a 澳洲幸运5官方开奖结果体彩网:traditional individual retirement♛ account (IR♍A) or a Roth IRA.

You could then roll over that money into a 401(k) plan if you are hired by an employer that ꧂offers this plan in the future. This is only 🤪as long as the money from the 403(b) plan has not been commingled with contributory funds that you deposited into the IRA.

While IRS regulations allow the rollover of assets between 401(k) plans and 403(b) plans, employers are not required to allow rollovers into the plans they maintain. Whichever transfer you're thinking of, your employer must permit it.

Pre-Tax and Post-Tax Assets

Contributions to traditional 401(k) and 403(b) retirement plans are made with pre-tax dollars, meaning you save on income taxes inᩚᩚᩚᩚᩚᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ⁤⁤⁤⁤ᩚ𒀱ᩚᩚᩚ the year you make the contribution. That is, your annual income is reduced by the contributions you made that year, which reduces your taxable income.

As a result, rollovers or transfers 澳洲幸运5官方开奖结果体彩网:from a 🎐403(b) into a traditional retirement plan, such as a 401(k), are usually 🏅tax-freeꦿ since they are both funded with pre-tax dollars.

Conversely, Roth retirement accounts are funded with 澳洲幸运5官方开奖结果体彩网:after-tax dollars. You contribute the funds after taxes have been taken out of your wages. (Though there's no upfront tax break, qualified withdrawals in retirement are tax-free.) As a result, if a traditional 403(b) or 401(k) plan is converted and the funds are transferred into a Roth account, such as a Roth 401(k), the funds are subject to income tax. However, a Roth account can be rolled over into another Roth account tax-free.

Mixed Contributions

If the 403(b) account has both pre-tax and after-tax contributions, a distribution is considered to come from the pre-tax money, contributions, and taxable earnings first. Any non-taxable portion of the distribution, including after-tax contributions, can be rolled into a traditional or Roth IRA or to another eligible plan that accounts separately for taxable and non-taxable contributions.

For example, if you have a 403(b) consisting solely of pre-tax contributions and earnings, you can request a direct rollover of some or all of the account into a traditional IRA, a 401(k), another 403(b), or a government-eligible 457 plan with no tax consequences. If you roll it into a Roth account, on the other hand, like a Roth IRA, the distribution will be considered taxable income because Roth IRAs use after-tax dollars.

Direct and Indirect Rollovers

Direct rollovers, trustee to trustee, are not subject to tax withholding. A direct rollover is when the retirement plan administrator makes the payment directly to another retirement plan or to an IRA. It's important to note that the administrator🅷 may issue a check made payable to the new account, which must be deposited within 60 days. No taxes will be withheld from the transfer amount, but there could be a penalty if the money is not re-deposited into the new IRA within the 60-day period.

The safest way to process a direct rollover is to have the administrator process a trustee-to-trustee transfer, which electronically transfers the funds from the old plan to the new one. The IRA owner does not re💃ceive a ch♏eck, and there are no taxes withheld nor any penalties.

澳洲幸运5官方开奖结果体彩网:Indirect rollovers are when the check is made out to and sent directly to the plan participant. An indirect rollover is subject to 20% withholding. For an indirect rollover to remain completely untaxed, the participant has to make up the withheld amount.

The Bottom Line

The 403(b) and 401(k) retirement plans are similar in their design and features. Both are 澳洲幸运5官方开奖结果体彩网:tax-deferred plans that allow your earnings to grow tax-free. However, 403(b) plans are typically reserved for government employees and teachers, while 401(k)s are typically reserved for the private sector. Transferring between them can be a complex process, unless you elect a direct, trustee-to-trustee transfer. Reach out to your plan administrator if you have any questions about how to go through this process.