408 (b)
I have a client with a variable 403 (b) retirement annuity. Is it possible to initiate a transfer of this type retirement account to a new custodian as a traditional IRA without incurring penalties?
I read that transfer may pose problems for the client, but I am unsure whether the articles I have read apply the transfer of ownership or custodian.
Thanks
Permalink Submitted by Alan - IRA critic on Mon, 2015-09-14 17:29
You were probably reading about a transfer of 403b accounts to another 403b provider. For a direct rollover of a 403b plan to an IRA, there is no tax or penalty.
Permalink Submitted by Anthony Lehrer on Mon, 2015-09-14 20:43
Sorry – I types 403 (b) – the client own a 408 (b) what is the difference for this type of account?
Permalink Submitted by Alan - IRA critic on Mon, 2015-09-14 22:33
A 408b is an Individual Retirement Annuity, basically an annuity in a traditional IRA account. These accounts can be transferred to a non annuity IRA without tax or penalty from the IRS. However, if the IRA annuity is still within the surrender period there may surrender charges due to the insurance company that issued the IRA annuity.