Permalink Submitted by Alan Spross on Sat, 2010-01-23 19:47
If you have separated from service or have reached age 59.5, you can do a direct rollover to a traditional IRA and avoid withholding. In that case the entire rollover goes into the IRA with no tax due. But if you have the check made out to you with the intent to roll it over yourself within 60 days, 20% must be withheld from the distribution for federal taxes, and you would have to come up with replacement cash to complete the rollover.
You could also convert to a Roth IRA directly from the 403b if you wish, but a Roth conversion would be taxable.
Permalink Submitted by Alan Spross on Sat, 2010-01-23 19:47
If you have separated from service or have reached age 59.5, you can do a direct rollover to a traditional IRA and avoid withholding. In that case the entire rollover goes into the IRA with no tax due. But if you have the check made out to you with the intent to roll it over yourself within 60 days, 20% must be withheld from the distribution for federal taxes, and you would have to come up with replacement cash to complete the rollover.
You could also convert to a Roth IRA directly from the 403b if you wish, but a Roth conversion would be taxable.