403b Rollover and IRA Rollover
I have a client that retired with a 403b account that would only allow one distribution rather than multiple partial distributions.
Thus, we created a new IRA account and the 403b trustee drew a check payable to the new custodian fbo the client. The check indicated a ‘direct rollover’ of the funds to the IRA.
My question is: Can my client take a distribution from the IRA and deposit the funds into a new IRA annuity without taxation or penalty as long as it is done within the 60 day window?
We are getting a very hard time trying to complete the ACAT transfer as we are not able to get a signature guarantee medallion stamp that is being asked for.
Thank you for any replies!
Permalink Submitted by Alan - IRA critic on Tue, 2016-10-04 00:20
The best way to move the IRA money into an IRA annuity is by direct transfer since the number of indirect 60 day rollovers from IRA to IRA are limited to one per 12 month period. If you have to take a distribution from the IRA, then client would not have been able to have done a 60 day rollover in the 12 months prior, and if client does one now could not do another in the next 12 months. Note that the direct rollover from the 403b to the IRA does NOT count with respect to the one rollover rule, as that is only for IRA to IRA rollovers. Note that if the client changes his mind about the annuity during any “free look period” doing a 60 day rollover into the annuity would eliminate the option of a 60 day rollover out of it. The insurance company would then have to cooperate with a direct transfer request, and I hear that sometimes this can be a problem.