403b rollover question

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
medtech
Posts: 28
Joined: Sun May 27, 2007 12:50 pm

403b rollover question

Post by medtech »

Due to help and advise I've received here I'm attempting to do a account rollover. I'm attempting to roll my VALIC 403b account into a IRA with Fidelity. (My other accounts are at fidelity and it's easier than using vanguard) I've been working on this off and on for over 6 months. VALIC has blocked me at every turn. Every form I fill out gets lost, or need to be notorized, or gets lost in the mail, or they need my employers permission, etc...

Anyway, Now they are telling me they cannot release the funds becasue it's against the law. They say there are new IRS regulations this year and they cannot release the money until I quit my job?!?

They continue to chant that I need to quit my job or get my employers permision, but this is a non-matched account. My employer has never put one penny into this account.

Well I'm to angry to think straight at the moment. Thanks in advance for your assistance.
User avatar
JMacDonald
Posts: 2343
Joined: Mon Feb 19, 2007 5:53 pm

Post by JMacDonald »

Hi,
Try asking your question at www.403bwise.com. There have been changes to the regs so you may be out of luck: http://www.403bwise.com./wisemoves/newt ... rules.html.
Best Wishes, | Joe
User avatar
LH2004
Posts: 1741
Joined: Tue Mar 27, 2007 4:59 pm
Location: New York, NY

Post by LH2004 »

You're under 59 1/2, and this is money from salary reduction contributions? Then it can't be rolled over to an IRA, and that's not a recent change it the law.
User avatar
doug91
Posts: 276
Joined: Tue Feb 12, 2008 5:47 pm

Post by doug91 »

Yeah, 403bwise can give you the definitive answer, but it's very likely that this is accurate. 403(b)s (and I believe a number of other employer-sponsored plans) are pretty well locked in place while you're with the sponsoring employer. One thing to look into is whether your particular plan with VALIC offers the Profile Retirement Program. This is the least nasty of the AIG/VALIC offerings, but it's relatively new (introduced late 2007), so not everyone that has AIG/VALIC plans appears to have access to this particular one.

http://www.aigretirement.com/Profile-Re ... 17430.html

This gives you no load, no "Separate Account Charge" to a set of mutual funds. They're not great, but they're a mile better than anything else in the AIG/VALIC porfolio. If they do have it, make absolutely certain that you don't select the optional "advisory service," which adds an unnecessary 0.45% expense to your account.
gassert
Posts: 178
Joined: Thu Apr 26, 2007 7:50 pm

Post by gassert »

As stated, unless you are 59.5+ and the plan allows, you wont be able to move the funds while still employed. Doesn't matter that it's your contribution.

However, as an alternative, you can do a direct transfer (not a rollover) to another provider within the employer plan (assuming such exists).
Topic Author
medtech
Posts: 28
Joined: Sun May 27, 2007 12:50 pm

Post by medtech »

thank you. I found a work-around to my problem. My frustration boiled over after months of problems and lies from VALIC. The've turned me from a satisfied x-customer to a hater. I will be a vocal advocate of NOT investing funds with them.
Retired1809
Posts: 374
Joined: Fri Feb 23, 2007 4:11 pm
Location: North Carolina, USA

Be sure you're not giving up a state income tax break.

Post by Retired1809 »

Before you roll your 403(b) into any IRA,please ask if you're giving up any potential state income tax benefits that you would otherwise receive on the 403b distributions. For example, some state employees don't have to pay state income taxes on certain retirement income they receive but they might lose this if they roll into an IRA. The tax treatment varies among states and among empoyers. Just consider it before you make the transfer. Afterwards, its too late.

Maybe you have another choice, maybe roll into a low cost provider's 403b?
Regards.
Post Reply