Roll a govt 457b into 403b or not?

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tenkuky
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Joined: Sun Dec 14, 2014 4:28 pm

Roll a govt 457b into 403b or not?

Post by tenkuky » Fri Jun 22, 2018 10:10 am

Bumping this from last week and tweaking due to lack of responses..

I just realized that Univ California retirement programs had not yet (but soon will be) implementing a quarterly fee of $8.75 for my 457b account held with them, regardless of separated or active employee status. My legacy 457b is mid 5-figures, mainly in Fidelity BrokerageLink index funds.
I am contributing to a Fidelity run 403b at my workplace which will allow a rollover and it already has a $6 quarterly fee.
I'd rather not pay 2 fees.

Is there a disadvantage to rolling over the 457b into the 403b to save $35 a year?
I know the 457b allows you to distribute penalty free before 70.5, but is that the only reason not to, and how valuable is this feature?
I assume creditor protection exists either way.

Thanks!

PFInterest
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Joined: Sun Jan 08, 2017 12:25 pm

Re: Roll a govt 457b into 403b or not?

Post by PFInterest » Wed Aug 08, 2018 5:44 pm

move if for better funds and lower fees. sounds like thats you.
do you need all your 457 money before 70? otherwise....pass.

Ron Ronnerson
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Location: Bay Area

Re: Roll a govt 457b into 403b or not?

Post by Ron Ronnerson » Wed Aug 08, 2018 6:19 pm

Assuming low cost funds are available to you in both the 457b and the 403b, I would not roll it over. With a 457b, you can access the funds without penalty if you separate from the employer regardless of your age. That's a great feature. $35/year isn't so terrible when you're talking about a balance in the mid 5-figures (that will hopefully continue to grow). If you had $100 in the account, it would be a different story.

infotrader
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Re: Roll a govt 457b into 403b or not?

Post by infotrader » Wed Aug 08, 2018 6:21 pm

tenkuky wrote:
Fri Jun 22, 2018 10:10 am
Bumping this from last week and tweaking due to lack of responses..

I just realized that Univ California retirement programs had not yet (but soon will be) implementing a quarterly fee of $8.75 for my 457b account held with them, regardless of separated or active employee status. My legacy 457b is mid 5-figures, mainly in Fidelity BrokerageLink index funds.
I am contributing to a Fidelity run 403b at my workplace which will allow a rollover and it already has a $6 quarterly fee.
I'd rather not pay 2 fees.

Is there a disadvantage to rolling over the 457b into the 403b to save $35 a year?
I know the 457b allows you to distribute penalty free before 70.5, but is that the only reason not to, and how valuable is this feature?
I assume creditor protection exists either way.

Thanks!
I don't think you understand how the UC plan fee is charged: it is charged against the DC Plan, so you will be charged a quarterly fee anyway regardless of picking either 457 or 403.

I made a mistake by putting money into 457 plan which does not have the feature of rolling the balance out to your tIRA while in service.

infotrader
Posts: 146
Joined: Tue Feb 28, 2017 2:39 pm

Re: Roll a govt 457b into 403b or not?

Post by infotrader » Wed Aug 08, 2018 6:22 pm

Ron Ronnerson wrote:
Wed Aug 08, 2018 6:19 pm
Assuming low cost funds are available to you in both the 457b and the 403b, I would not roll it over. With a 457b, you can access the funds without penalty if you separate from the employer regardless of your age. That's a great feature. $35/year isn't so terrible when you're talking about a balance in the mid 5-figures (that will hopefully continue to grow). If you had $100 in the account, it would be a different story.
There is no cost benefit for UC plan, they are all structured the same way.

UniversityEmployee9
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Re: Roll a govt 457b into 403b or not?

Post by UniversityEmployee9 » Wed Aug 08, 2018 6:36 pm

You can take distributions from a 457b without penalties before 59.5, so long as you're separated from your employer, FYI.

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Peter Foley
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Re: Roll a govt 457b into 403b or not?

Post by Peter Foley » Wed Aug 08, 2018 8:09 pm

Ron wrote:
Assuming low cost funds are available to you in both the 457b and the 403b, I would not roll it over. With a 457b, you can access the funds without penalty if you separate from the employer regardless of your age. That's a great feature. $35/year isn't so terrible when you're talking about a balance in the mid 5-figures (that will hopefully continue to grow). If you had $100 in the account, it would be a different story.
I agree. Even if today you are not planning to retire before age 59.5, it gives you an option should circumstances change and you decide to retire early.

tenkuky
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Joined: Sun Dec 14, 2014 4:28 pm

Re: Roll a govt 457b into 403b or not?

Post by tenkuky » Thu Aug 09, 2018 8:03 am

Thank you all!
Lots to ponder, but I agree that the fee is low considering the balance, and I have no immediate need for the money.
So will let it ride.
Again, BH guides me through indecision!

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