60-day rollover
I have a 403(b) from a previous employer. I want to roll that into another account. Do I have to have 20% withheld? I am 56 I don’t want the money now but I may want to put it into a self-directed IRA brokerage account. Once I take it out of the 403(b) – can I put it back in if I want to (i.e., I decide not to do the self-directed IRA?) Thx.
Permalink Submitted by Alan Spross on Tue, 2008-05-27 23:44
You may be able to directly transfer the 403b to either an IRA or to your current employer plan if such plan accepts incoming transfers. Either transfer would be free of withholding.
However, if the check is made out to you, 20% withholding in mandatory and you would need to supply that amount to complete the tax free rollover to an IRA. Therefore, you should make the transfer as a direct rollover. Once the funds are transferred or distributed, your former plan will not accept them back. However, if you current employer plan accepts rollovers from an IRA, you may be able to transfer the IRA funds into that plan.
Again, if you wish to move the funds, avoid doing it by rollover and instead do a trustee to trustee transfer. Your former plan MUST allow these transfers, known as direct rollovers, and you will avoid the withholding.