SRA

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legio XX
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SRA

Post by legio XX » Fri Feb 27, 2009 9:26 am

I have a small SRA with CREF, from a year in which I had no income but a fellowship that didn't qualify as earned income so I couldn't put it in my IRA. I decided to save the equivalent of my IRA contribution to keep myself "honest." So now I have this small account that has been just about following the market for 13 years.

If I understand this, the only way I can move this money (post tax $$) is to withdraw it, and anything over the initial deposit will be taxable as ordinary income. Not that there's much of that, but if it was possible I would like to roll this over into another account. I have a trad'l IRA and a Roth, but I've been told that neither of those accounts can receive a rollover from an SRA.

The Bogleheads is the only place where people seem to even know what an SRA is! So, before I bite the bullet, is there any other way to deal with this? I don't want another annuity. My 403-b has that covered.

Any suggestions?

Vic

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Dan Kohn
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Vanguard

Post by Dan Kohn » Fri Feb 27, 2009 10:54 am

Call Vanguard Retirement Services at 800-414-1742, and ask them. I thought you could rollover a supplementary retirement account into your traditional IRA, but perhaps only when you leave your employer.

Please post what you learn for posterity (and Google). Good luck.

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legio XX
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SRA

Post by legio XX » Fri Feb 27, 2009 7:43 pm

Dan,

Thanks for the suggestion. Unfortunately, this type of account can only be replaced with another annuity. It can't be rolled over into either a traditional or Roth IRA.

I didn't want another annuity account, although that didn't stop the nice folks at Vanguard from trying to sell me one . . . :?

Darn it! Guess I'll just have to spend it . . . .

Vic

Ken Reckers
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Post by Ken Reckers » Sat Feb 28, 2009 12:43 am

Vic,

Are you sure you can't rollover your SRA into an IRA if you are separated from service? I would call TIAA-CREF and ask. SRA's are more flexible than RA's. I bet you already checked, but I said it just in case.

I looked at my contracts (which of course may be different from yours) and I found at least one endorsement that seems to allow tax-free rollover to an IRA. The references to the Internal Revenue Code are too obscure for me to know for sure.

You also could keep it there if you wanted to invest in something you can't get elsewhere, like the TIAA real estate account.

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legio XX
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Location: NYC

SRA

Post by legio XX » Sat Feb 28, 2009 7:27 am

Ken,

Thanks. I did call TIAA after Vanguard. This particular account had nothing to do with the employment that brought me to TIAA in the first place. I had already left. Anyway, short answer is that I can either put it into another TIAA fund, open another similar annuity somewhere else or take the $$ and pay the taxes. One of the points of all this is to simplify a fragmented portfolio. This is a small account that has been sitting for a good while. I'm not going to add to it, and the taxable portion, the accumulation of 13 years, is not much. I also need $$ to cover expenses for an upcoming research trip - less than three weeks and counting! So, it goes.

When I called TIAA to close the account, the rep talked me through the steps for an online withdrawal, but -- ta da!!-- the account doesn't show up in my online info! It isn't a lost account; it's on their records, just not accessible online. Why? No idea. So I am now waaaaiiiting for the paperwork. Why should it take "5-7 days" to get it to me? We'll see.

Thanks for the input, folks. Hope this is helpful to someone else somewhere down the road.

Vic

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BruceM
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Post by BruceM » Sat Feb 28, 2009 11:48 am

legio XX wrote:I have a small SRA with CREF, from a year in which I had no income but a fellowship that didn't qualify as earned income so I couldn't put it in my IRA.
Just curious...did your employer use the calculations for 'includable compensation' from past working years to make a 403(b) contribution this year in which your only source of income was the fellowship grant?
legio XX wrote:
If I understand this, the only way I can move this money (post tax $$) is to withdraw it, and anything over the initial deposit will be taxable as ordinary income. Not that there's much of that, but if it was possible I would like to roll this over into another account. I have a trad'l IRA and a Roth, but I've been told that neither of those accounts can receive a rollover from an SRA.
There is no reason that you cannot roll over the basis in the SRA to your TIRA, unless there are withdrawal or rollover restrictions on the 403(b) (as I understand there are on certain TIAA plans). But generally, once you separate from service (or are fully disabled or reach 59.5), the account balance, including basis, is fully transferrable to your TIRA. Now, if TIAA-CREF is still sticking with the old rule of sending you the check for the plan basis, you may deposit this into your TIRA if you do so within 60 days.

One other little interesting quirk that just popped up in pub 590 on p.18....the IRS is asking that a retirement plan to IRA rollover that includes basis NOT be recorded and filed on a form 8606 for that year, but be included on the future 8606 when a withdrawal is made. So I have no idea how this is to be recorded and kept for future TIRA withdrawals.

BruceM

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