Permalink Submitted by Alan Spross on Wed, 2009-07-08 23:26
I think Al meant to ask if she is still employed with the plan sponsor. Since she is not, and since the plan is a Govt 457, a direct rollover can be made to either a traditional IRA or a Roth IRA. The 100,000 income limit for the Roth conversion applies this year, but will be gone starting next year. In addition, a Roth conversion done in 2010 allows the taxable income to be deferred to 2011 and 2012.
Some people may wish to split the direct rollover between the TIRA and the Roth, but the plan is not required to offer two direct rollovers. At that point it is still possible to get the job done, but it is complicated by mandatory withholding issues for any check made out to the employee.
Permalink Submitted by Al Fry on Wed, 2009-07-08 18:41
Is it a Governmental 457(b)? Is he retired?
Permalink Submitted by Geoffrey Kasher on Wed, 2009-07-08 19:07
It is a government 457 plan (local county) and she is not retired..she is 45 years old and no longer employed by the county
Permalink Submitted by Alan Spross on Wed, 2009-07-08 23:26
I think Al meant to ask if she is still employed with the plan sponsor. Since she is not, and since the plan is a Govt 457, a direct rollover can be made to either a traditional IRA or a Roth IRA. The 100,000 income limit for the Roth conversion applies this year, but will be gone starting next year. In addition, a Roth conversion done in 2010 allows the taxable income to be deferred to 2011 and 2012.
Some people may wish to split the direct rollover between the TIRA and the Roth, but the plan is not required to offer two direct rollovers. At that point it is still possible to get the job done, but it is complicated by mandatory withholding issues for any check made out to the employee.
Permalink Submitted by Geoffrey Kasher on Wed, 2009-07-08 23:38
The client is not employed by the sponsor any longer. Thanks for the help…