Deferred compensation
Is the deferred comp. treated any different than an IRA with regard to roth conversion or distribution. Does it have to be rolled to an IRA before going to a Roth?
Is the deferred comp. treated any different than an IRA with regard to roth conversion or distribution. Does it have to be rolled to an IRA before going to a Roth?
Permalink Submitted by Alan Spross on Tue, 2010-11-09 22:53
A government 457b plan can be converted directly to a Roth IRA without first rolling it to a traditional IRA. Alternately, a distribution can be taken and then rolled to a Roth IRA.
Permalink Submitted by BruceM on Wed, 2010-11-10 06:58
It depends on what you mean by ‘deferred compensation’
If you mean a government 457(b) plan, then it will be as Alan has described.
If you mean a non-governement 457(b), a 457(f) or a private for-profit deferred compensation plan, these are not transferrable to an IRA or convertable to a Roth IRA.
BruceM
Permalink Submitted by John Clark on Wed, 2010-11-10 15:32
If it is Nonqualified Deferred Comp, it does not fall under IRA or qualified plan rules. This is typically a discriminatory Plan for the highly paid. You may use deferred comp, if withdrawal allowed in plan, to pay conversion tax. Sadly you will normally taxed on withdrawal as well as conversion amount.