457b to TIRA to Roth IRA

Submitted by Stuart Alpern on Sat, 2023-02-25 00:45

Aged 65, established several Roth IRA’s in the 1990’s. Haven’t contributed to the Roth IRA’s since then If a number of 457(b) plans are to end up in Roth IRA’s, is it best practice to rollover/convert to a TIRA first thus establishing some sort of paper trail and then convert to a Roth IRA(more paper trail)-or- should the 457b’s simply be converted/rolled over to Roth IRA’s? Also do either of these get inputted into a 8606(The last 8606 was done in 1997)?



Submitted by Alan - IRA critic on Sat, 2023-02-25 01:29

  • It does not matter whether you convert directly from the 457b or from a TIRA. A TIRA to Roth conversion must be reported on Form 8606 while a direct 457b to Roth IRA does not. 
  • If you were filing an 8606 in 1997, it was to report a non deductible TIRA contribution, therefore if you still have a TIRA account, some portion of it is IRA basis. A conversion from a TIRA with basis will have a non taxable portion, so if you convert from your TIRA without first rolling the 457b into the TIRA, your conversion can be done partially tax free. 
  • Generally, you would only convert to Roth if the tax rate paid on the conversion will be less than or at least no more than your tax rate in retirement if you don’t convert.
  • Your Roth IRAs are already qualified and fully tax free including any future distributions from conversions. 

Submitted by Stuart Alpern on Sat, 2023-02-25 15:48

All of the relevant  IRA’s are Roth’s these days.  Your assistance is as always appreciated greatly. As the 457(b) isn’t an IRA I wonder if I treat it as one and report the 457b rollover  amount  on the 2023 1040 Line 4a and also on 4b (or its 2023 equivalent) ? and writing rollover” in the space left of the amount on line 4b or is it 4a or both?Also I receive pension income these days so I’m not sure if 5a/5b is merely pension income or if the 457b rollover gets added into 5a/5b. 

Submitted by Alan - IRA critic on Sat, 2023-02-25 16:26

The Roth 457b rollover would be reported on lines 5a and 5b along with pension payments. If rolled directly to a Roth IRA, the direct rollover would be taxable on 5b along with the pension.

Submitted by Stuart Alpern on Sat, 2023-02-25 16:38

Thanks.  I’m still conflicted regarding the 457b to TIRA to Roth IRA vs 457(b) to Roth IRA.Someone suggested there’s a greater paper trail (two 5498’s) with the three step process rather than the the 457b to Roth(only 1 5498).   But since there are no TIRA balances perhaps avoiding an 8606 filing might be more/less prudent and bypass the 3 step process.  I wonder if this is a classic example of 6 of one, half a dozen of another.

Submitted by William Tuttle on Sun, 2023-02-26 06:04

  • A direct 457b to Roth IRA taxable rollover is far less complex than a 457b rollover to a traditional IRA and then a Roth conversion.
  • I would only use a multi-step process if you want to spread the taxation across multiple years, you (have and will not have) no pre-tax balances in all traditional, SEP and SIMPLE IRA accounts and the 457b plan does not allow partial rollovers.

Submitted by Stuart Alpern on Sun, 2023-02-26 12:48

Thanks-simplicity it shall be!

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