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Zhicheng Lai
Zhicheng Lai, Enrolled Agent(EA)
Category: Tax
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Experience:  5 years tax preparing experience
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What are the penalties if I roll my 403B while I am still employed

Resolved Question:

I have a 403B account I wish to combine in a rollover IRA with my other funds, my 403B is no longer meeting my needs and I want it to be professionally managed. What are the penalties if I move the assets while still employed?
Submitted: 7 years ago.
Category: Tax
Expert:  Zhicheng Lai replied 7 years ago.
I don't think you can roll over your 403(b) to IRA while you are employed in the same job. If you are under 59 and 1/2, and take a distribution, you are going to pay 10% penalty plus Federal and state income tax.
Customer: replied 7 years ago.
I am going to fill out the distribution form as if I were seperated from employment. It is a voluntary plan with only my money in it. My employer has never made a contribution. Since I am rolling to IRA account are there any penalties?
Expert:  Zhicheng Lai replied 7 years ago.

You should check with your employer to see if your employer allows you to roll over the money to IRA.

If the employer doesn't allow you, you may pay the penalty plus tax by taking the distribution.

A rollover from a 403(b) plan to an IRA may be permitted if there has been a distributable event. A distributable event would include death, disability, separation from service, or attainment of age 59 ½. You may also transfer the asset to another 403(b) by using 90-24 Transfer if your employer permits.

 

Zhicheng Lai, Enrolled Agent(EA)
Category: Tax
Satisfied Customers: 811
Experience: 5 years tax preparing experience
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