A:

The IRS says that you can roll a 403(b) plan into a 401(k) plan if you now work for an employer that offers a 401(k) plan. You can also roll a 403(b) plan into a self-employed 401(k) plan if you are self-employed. However, if you work for an employer that does not offer a 401(k) plan, then you cannot roll a 403(b) plan into any type of 401(k) plan. If your employer offers a SEP plan or 457 plan, then you can also roll a 403(b) plan into one of those. Of course, you can always roll a 403(b) or other qualified plan offered by a previous employer into a traditional or Roth IRA. Current rules allow you to then roll that money over into a 401(k) plan if you are hired by an employer that offers this plan in the future, as long as the money from the 403(b) plan has not been commingled with contributory funds that you deposited into the IRA. However, your employer must permit rollovers into its retirement plan in order for an employee to be able to roll a previous plan into its plan. Of course, most employers will permit this because of the money that their plans will receive.

SEE: Common IRA Rollover Mistakes

RELATED FAQS
  1. My old company offers a 401(k) plan and my new employer only offers a 403(b) plan. ...

    It depends. While the regulations do allow rollover of assets between 401(k) plans and 403(b) plans, employers are not required ... Read Answer >>
  2. What is the difference between a 401(k) plan and a 403(b) plan?

    Administered by for-profit, private companies, 401(k) plans are more common than the nonprofit or government-sponsored 4 ... Read Answer >>
Related Articles
  1. Retirement

    What to Do With Your 403(b) Funds if You Change Jobs

    If you have a 403(b) plan and change jobs, there are a few options for handling the funds in it.
  2. Financial Advisor

    Top 403(b) Questions Answered

    This plan doesn't get as much attention as its more popular cousin - the 401(k) - but it has a lot of benefits for eligible investors.
  3. Retirement

    Top 9 Benefits of a 403(b) Plan

    Find out how the 403(b) plan helps employees of nonprofit entities meet their retirement goals.
  4. Retirement

    Top 9 Benefits Of A 403(b) Plan

    A 403(b) plan is a tax-sheltered retirement plan for employees of many non-profit entities, including public safety and educational organizations.
  5. Financial Advisor

    What To Do With Forgotten 401(k) Plans

    Job hopping is more acceptable, but as a result, workers are leaving 401(k) plans behind. In order to maximize savings that may not make the most sense.
  6. Retirement

    A Guide To Rollover A 401(k) To A New Employer

    Here's exactly what you need to know.
  7. Financial Advisor

    457 Plans and 403(b) Plans: A Comparison

    There's plenty of advice about 401(k) plans, but what about 457 and 403(b) plans?
  8. Financial Advisor

    403(b) Plan Tutorial

    Learn about the set-up, the contributions to and the distributions from this retirement plan for certain employees of public schools and tax-exempt organizations.
  9. Retirement

    Got a 403(b) Plan? Here's What You Need to Know

    Many folks do not understand the ins and outs of their 403(b) plan. Let's change that.
  10. Retirement

    401(k) Investing for Military Veterans

    Military personnel have access to a thrift savings plan, which is similar to a 401(k) plan.
RELATED TERMS
  1. Designated Roth Account

    An individual retirement plan in which employees can have all ...
  2. Direct Rollover

    A distribution of eligible rollover assets from a qualified plan, ...
  3. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  4. Portable Benefits

    Benefits that have been paid into or accrued in an employer-sponsored ...
  5. Active Participant Status

    Active-participant status is a reference to an individual's participation ...
  6. Roth Option

    An option available within some employer-sponsored qualified ...
Hot Definitions
  1. Current Ratio

    The current ratio is a liquidity ratio measuring a company's ability to pay short-term and long-term obligations, also known ...
  2. SEC Form 13F

    A filing with the Securities and Exchange Commission (SEC), also known as the Information Required of Institutional Investment ...
  3. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  4. Risk Averse

    A description of an investor who, when faced with two investments with a similar expected return (but different risks), will ...
  5. Indirect Tax

    A tax that increases the price of a good so that consumers are actually paying the tax by paying more for the products. An ...
  6. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
Trading Center