82 yr old 403b

Submitted by Douglas Bauerband on Sat, 2017-10-28 00:51

client has 3 403b from different companies.

We are combining them all into one IRA

a. does the client lose any protection from the 403b that are not in the IRA?

b. would it be better to combine them all in one 403b on the outside instead of IRA?

any other info would be helpful

Thank you
Doug



Submitted by Alan - IRA critic on Sat, 2017-10-28 02:04

NJ provides 100% creditor protection for IRA accounts, so no loss of protection. No reason not to roll them all into a single IRA account. RMDs must be distributed from the 403b accounts prior to the rollovers.

Submitted by Ben Meyer on Sat, 2017-10-28 05:13

  • As with a recent previous posting of yours, if the client resides in NJ, you should be aware that the federal basis is zero for 403(b) contributions from salary reductions, but the contributions are basis for NJ purposes.  In this case the client should start to maintain NJ Worksheet C after the rollover to an IRA.  Worksheet C is the NJ equivalent of federal form 8606.
  • If the client resides in NY the implications for NY state income tax on distributions are different.  In NYS, distributions from the NYCTRS 403(b) plan are exempt from NY income tax.  Distributions from other 403(b) plans and IRA plans are taxable by NYS, but a $20,000 pension exclusion may apply.  Thus, considering that the client is now taking RMDs, a rollover from a NYCTRS 403(b) to an IRA would subject the RMD distributions to taxation by NY state.

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