Any reason not to rollover 403b to IRA?

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busdriver
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Any reason not to rollover 403b to IRA?

Post by busdriver » Tue Dec 05, 2017 12:53 am

In trying to simplify my 94 year old father-in-law's finances/portfolio, I've just become aware of the ability to rollover a 403b plan to IRA.

Details are that his first wife, (my wife's mother), was involved in the school system many years ago and had accrued a 403b retirement account at Valic. She passed away 15 years ago and my F-I-L receives yearly distributions on this.

He has an Ameriprise IRA, which is in the process of being transferred to Vanguard.

Once the Vanguard IRA is in place, is there any downside, (other than lawsuit protection), to rolling over the Valic annuity to Vanguard to have one less account to deal with?

retiredjg
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Re: Any reason not to rollover 403b to IRA?

Post by retiredjg » Tue Dec 05, 2017 10:59 am

Sounds like a good idea to me.

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BogleMelon
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Re: Any reason not to rollover 403b to IRA?

Post by BogleMelon » Tue Dec 05, 2017 11:05 am

Depends on your state, IRA could be unprotected from liability/creditors.
Excuse my English, it is my second language! | | "One of the funny things about stock market, every time one is buying another is selling, and both think they are astute" - William Feather

informal guide
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Re: Any reason not to rollover 403b to IRA?

Post by informal guide » Tue Dec 05, 2017 11:19 am

Rolling the 403b over will indeed simplify things; also, direct Vanguard investments are certainly less expensive than VALIC, even if the VALIC investments are Vanguard funds.

Two cautions: 1) he should be sure the beneficiary designations on the IRA are what he wants; it wwill apply to both amounts. 2) I believe to roll over if one is taking RMDs, one has to take the year's RMD before rolling over. So if you do it this year, there is no likely impact. But if it is next year, you may have to take the entire 2018 RMD first.

If you are now transferring the IRA from Ameriprise, Vanguard can answer this question and perhaps get the VALIC transaction accomplished before year-end.

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busdriver
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Re: Any reason not to rollover 403b to IRA?

Post by busdriver » Tue Dec 05, 2017 2:25 pm

Thank you for your replies.

Prudence
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Re: Any reason not to rollover 403b to IRA?

Post by Prudence » Tue Dec 05, 2017 11:00 pm

busdriver wrote:
Tue Dec 05, 2017 12:53 am
In trying to simplify my 94 year old father-in-law's finances/portfolio, I've just become aware of the ability to rollover a 403b plan to IRA.

Details are that his first wife, (my wife's mother), was involved in the school system many years ago and had accrued a 403b retirement account at Valic. She passed away 15 years ago and my F-I-L receives yearly distributions on this.

He has an Ameriprise IRA, which is in the process of being transferred to Vanguard.

Once the Vanguard IRA is in place, is there any downside, (other than lawsuit protection), to rolling over the Valic annuity to Vanguard to have one less account to deal with?
My wife had a VALIC account and we recently rolled it into her VG traditional IRA account. One disadvantage is that her VALIC account had a 4.5% interest rate which was hard to give up. But, we did it for simplification and flexibility, and because the account balance was low. Over the long term I hope to beat the 4.5% with a 50/50 allocation at VG.

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busdriver
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Location: Vancouver, WA

Re: Any reason not to rollover 403b to IRA?

Post by busdriver » Wed Dec 06, 2017 2:27 pm

Thank you for your comments.

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