I have a 403(b) from a old employer. I would like to convert it to a 401(k). How can I do that?

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. Should I purchase a master limited partnership (MLP) in my retirement account?

    Learn why investors may have to pay taxes on dividends from master limited partnerships, or MLPs, held in individual retirement ...
  2. What are the tax implications of owning a master limited partnership (MLP)?

    Learn about the tax benefits of owning units in a master limited partnership, and understand how distributions are treated ...
  3. How should I invest the money I keep on my IRA?

    For individuals who are just starting to save, certificates of deposit can be a good place to start, but the interest rates ...
  4. Why choosing the right investment adviser is crucial for your portfolio's health

    Absolutely! Just as finding a good mechanic will help keep your car running smoothly, finding a good broker or financial ...
RELATED TERMS
  1. Current Service Benefit

    The amount of pension benefit accrued by an employee who had ...
  2. Self Invested Personal Pension (SIPP)

    A tax-efficient retirement savings account available in Great ...
  3. Senior Move Manager

    Senior move managers (SMMs) help seniors downsize and relocate ...
  4. Elder Care

    Elder care, sometimes called elderly care, refers to services ...
  5. Gold IRA

    Definition of Gold IRA
  6. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...

You May Also Like

Related Articles
  1. Mutual Funds & ETFs

    This Gold ETF is Fine for Traders, Not ...

  2. Mutual Funds & ETFs

    Should GE Be Part of Your Portfolio?

  3. Retirement

    Top 10 Stocks for Retirement Portfolios

  4. Professionals

    Mutual Funds: How Many is Too Many?

  5. Trading Strategies

    Top 7 Roth IRA Stocks for 2015

Trading Center