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. How does a defined benefit pension plan differ from a defined contribution plan?

    Learn the differences between defined benefit plans and defined contribution plans when reviewing employer-sponsored qualified ...
  2. What are the best ways to pay off my mortgage quickly?

    Learn how mortgage payments may be reduced and how to save thousands on mortgage loans by lowering the interest and principle ...
  3. What are the advantages of an index fund over an ETF?

    Diversifying a portfolio is one of pillars of investing basics, and an index fund can provide an investor with exposure to ...
  4. How do deferred tax assets help in meeting retirement goals?

    Learn how tax deferred assets can help individuals achieve long-term financial goals such as retirement and how they differ ...
RELATED TERMS
  1. Self Invested Personal Pension (SIPP)

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

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

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

    Definition of Gold IRA
  5. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  6. Death Master File (DMF)

    Also known as Social Security Death Index. A list of people whose ...

You May Also Like

Related Articles
  1. Professionals

    How to Evaluate a Robo-advisor

  2. Professionals

    Who Wants to be a 401(k) Millionaire?

  3. Professionals

    Are Longevity Annuities in 401(k)s a ...

  4. Mutual Funds & ETFs

    Greedy on the Dollar? See This Leveraged ...

  5. Trading Strategies

    American Express: Headwinds and Tailwinds

Trading Center