Reason NOT to move $100k Roth 403b -> Roth IRA?

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Topic Author
need403bhelp
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Reason NOT to move $100k Roth 403b -> Roth IRA?

Post by need403bhelp »

Thanks, all, for your past help!

I am strongly considering moving $100k between DW & I from Roth 403b -> Roth IRA via CRD (coronavirus-related distribution).

Points I don't want to discuss:
1. Whether or not we are qualified to take CRD (we are).
2. Whether or not it is "allowed" to take CRD from Roth 403b and rapidly recontribute it to Roth IRA (I believe answer is yes per my review of forum posts, IRS documents, other sources).
3. Actually needing the $100k for other reasons (we have a pretty good cash cushion currently and, of course things can always change, but this would be quite unlikely).
4. Disadvantage of time out of market (plan to move entire balance to fixed income investments and move different accounts to equities before starting process).

I want to discuss any other caveats I might be missing. Specifically, we actually have very low ERs in our Roth 403b, so most of the movement would be to be able to take advantage of Merrill Edge Platinum Honors and/or brokerage transfer bonuses sooner than we would have otherwise.

I am making this post to understand any reasons NOT to go ahead make the $100k Roth 403b -> Roth IRA transfer.

Only consideration that I can come up with would be potentially giving up this space within employer plan. Specifically, this account is currently invested w/Fidelity in Roth 403b, but balanced could be transferred to TIAA to take advantage of fully liquid guaranteed minimum 3% TIAA Traditional (which we currently use in 457b account). I'm not 100% clear whether such a transfer could take place if we were no longer with current employer, but definitely can be done while working there.

Any other thoughts/suggestions as to why NOT to make $100k Roth 403b -> Roth IRA transfer would be much appreciate.

Thanks!
JBTX
Posts: 6961
Joined: Wed Jul 26, 2017 12:46 pm

Re: Reason NOT to move $100k Roth 403b -> Roth IRA?

Post by JBTX »

Only thing I can think of is 401ks (and presumably 403bs?) often have better liability / bankruptcy protections than Individual IRAs. This is heavily dependent on state law. It's a big advantage in CA. Somewhat less in states like TX which have decent IRA liability protection.

If I have a good cheap 401k plan with good options I tend to leave it there.

https://www.investopedia.com/articles/p ... ditors.asp

The above link does not make it clear whether 403bs have ERISA protection.
Topic Author
need403bhelp
Posts: 1096
Joined: Thu May 28, 2015 6:25 pm

Re: Reason NOT to move $100k Roth 403b -> Roth IRA?

Post by need403bhelp »

JBTX wrote: Sat Oct 17, 2020 1:20 pm Only thing I can think of is 401ks (and presumably 403bs?) often have better liability / bankruptcy protections than Individual IRAs. This is heavily dependent on state law. It's a big advantage in CA. Somewhat less in states like TX which have decent IRA liability protection.

If I have a good cheap 401k plan with good options I tend to leave it there.
Thanks, that is a good point.

I checked the first link that comes up via Google https://www.assetprotectionplanners.com ... -by-state/ and it lists "Yes" under "Roth IRA creditor protection?" for our state (and says No for California as you suggest in your post).
JBTX
Posts: 6961
Joined: Wed Jul 26, 2017 12:46 pm

Re: Reason NOT to move $100k Roth 403b -> Roth IRA?

Post by JBTX »

need403bhelp wrote: Sat Oct 17, 2020 1:24 pm
JBTX wrote: Sat Oct 17, 2020 1:20 pm Only thing I can think of is 401ks (and presumably 403bs?) often have better liability / bankruptcy protections than Individual IRAs. This is heavily dependent on state law. It's a big advantage in CA. Somewhat less in states like TX which have decent IRA liability protection.

If I have a good cheap 401k plan with good options I tend to leave it there.
Thanks, that is a good point.



I checked the first link that comes up via Google https://www.assetprotectionplanners.com ... -by-state/ and it lists "Yes" under "Roth IRA creditor protection?" for our state (and says No for California as you suggest in your post).
There may be limits on the amount of Roth protected. In some sites I see TX has limit of a number over $1 million.

I have seen argued in here by somebody who seemed knowledgeable on such matters that amounts rolled into IRAS from 401ks maintain protections of 401ks, even in CA. Honestly I don't know.
Topic Author
need403bhelp
Posts: 1096
Joined: Thu May 28, 2015 6:25 pm

Re: Reason NOT to move $100k Roth 403b -> Roth IRA?

Post by need403bhelp »

JBTX wrote: Sat Oct 17, 2020 1:32 pm
need403bhelp wrote: Sat Oct 17, 2020 1:24 pm
JBTX wrote: Sat Oct 17, 2020 1:20 pm Only thing I can think of is 401ks (and presumably 403bs?) often have better liability / bankruptcy protections than Individual IRAs. This is heavily dependent on state law. It's a big advantage in CA. Somewhat less in states like TX which have decent IRA liability protection.

If I have a good cheap 401k plan with good options I tend to leave it there.
Thanks, that is a good point.



I checked the first link that comes up via Google https://www.assetprotectionplanners.com ... -by-state/ and it lists "Yes" under "Roth IRA creditor protection?" for our state (and says No for California as you suggest in your post).
There may be limits on the amount of Roth protected. In some sites I see TX has limit of a number over $1 million.

I have seen argued in here by somebody who seemed knowledgeable on such matters that amounts rolled into IRAS from 401ks maintain protections of 401ks, even in CA. Honestly I don't know.
Thanks, look at the actual law for TX where I do reside https://statutes.capitol.texas.gov/Docs ... /PR.42.htm specifically "Sec. 42.0021" there are no limits of any kind expressed.
Sec. 42.0021. ADDITIONAL EXEMPTION FOR CERTAIN SAVINGS PLANS. (a) In this section, "qualified savings plan" means any stock bonus, pension, annuity, deferred compensation, profit-sharing, health, education, or similar plan or account, to the extent the plan or account is exempt from federal income tax or to the extent federal income tax on a person's interest in the plan or account is deferred until actual payment of benefits to the person. A plan or account that is subject to federal income tax is considered to be exempt from federal income tax for purposes of this section if the plan or account is subject to the tax solely under Sections 511 through 514, Internal Revenue Code of 1986. The term includes:

(1) a retirement plan sponsored by a private employer, government, or church;

(2) a retirement plan for self-employed individuals;

(3) a simplified employee pension plan;

(4) an individual retirement account or annuity, including an inherited individual retirement account or annuity;

(5) a Roth IRA, including an inherited Roth IRA;

(6) a health savings account;

(7) a Coverdell education savings account;

(8) a plan or account established under Subchapter F, Chapter 54, Education Code, including a prepaid tuition contract;

(9) a plan or account established under Subchapter G, Chapter 54, Education Code, including a savings trust account;

(10) a qualified tuition program of any state that meets the requirements of Section 529, Internal Revenue Code of 1986;

(11) a qualified ABLE program of any state that meets the requirements of Section 529A, Internal Revenue Code of 1986; and

(12) an annuity or similar contract purchased with assets distributed from a plan or account described by this subsection.

(b) In addition to the exemption prescribed by Section 42.001 and except as provided by this section, a person's interest in and right to receive payments from a qualified savings plan, whether vested or not, is exempt from attachment, execution, and seizure for the satisfaction of debts.

(c) An interest or right in a qualified savings plan that was acquired by reason of the death of another person, whether as an owner, participant, beneficiary, survivor, coannuitant, heir, or legatee, is exempt to the same extent that the interest or right of the decedent was exempt on the date of the decedent's death.

(d) Contributions to a qualified savings plan that are excess contributions under Section 4973, Internal Revenue Code of 1986, and any accrued earnings on such contributions are not exempt under this section unless otherwise exempt by law.

(e) Amounts distributed from a qualified savings plan are exempt from attachment, execution, and seizure for a creditor's claim for 60 days after the date of distribution. If the amounts qualify as a rollover contribution under the Internal Revenue Code of 1986, whether taxable or nontaxable, the amounts will continue to be exempt thereafter under this section.


(f) A person's interest in a retirement plan that is solely an unfunded, unsecured promise by an employer to pay deferred compensation is not exempt under this section unless otherwise exempt by law.

(g) A person is not prohibited by this section from granting a valid and enforceable security interest in the person's interest in or right to receive payments from a qualified savings plan to the extent permitted by, and in accordance with, the Internal Revenue Code of 1986 and the terms of the qualified savings plan to secure a loan to the person from the qualified savings plan. The person's interest in or right to receive payments from the plan is subject to attachment, execution, and seizure for the satisfaction of the security interest or lien granted by the person to secure the loan.

(h) If any provision of this section is held invalid or preempted by federal law, in whole or in part or in certain circumstances, the remaining provisions of this section remain in effect, to the maximum extent permitted by law.

(i) A reference in this section to the Internal Revenue Code of 1986 or a specific provision of the Internal Revenue Code of 1986 includes a subsequent amendment of that code or of the substance of that provision.
I bolded some interesting text. Specifically, I'm not sure how the text in (d) and (e) applies to CRD recontributions, and whether that qualifies as a "rollover" in the meaning of the text. However, it also doesn't seem to qualify as an "excess contribution," so my lay take would be that it would be protected for the full amount, but not 100% sure about this.

The $1 million amount you quoted seems, at least per Google, to be a FEDERAL amount protected by the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) https://rodgers-associates.com/blog/ret ... IRS%20levy https://www.investopedia.com/terms/b/bapcpa.asp.

Thanks again for the interesting insights and questions!
Last edited by need403bhelp on Sat Oct 17, 2020 2:12 pm, edited 1 time in total.
JBTX
Posts: 6961
Joined: Wed Jul 26, 2017 12:46 pm

Re: Reason NOT to move $100k Roth 403b -> Roth IRA?

Post by JBTX »

need403bhelp wrote: Sat Oct 17, 2020 1:56 pm
JBTX wrote: Sat Oct 17, 2020 1:32 pm
need403bhelp wrote: Sat Oct 17, 2020 1:24 pm
JBTX wrote: Sat Oct 17, 2020 1:20 pm Only thing I can think of is 401ks (and presumably 403bs?) often have better liability / bankruptcy protections than Individual IRAs. This is heavily dependent on state law. It's a big advantage in CA. Somewhat less in states like TX which have decent IRA liability protection.

If I have a good cheap 401k plan with good options I tend to leave it there.
Thanks, that is a good point.



I checked the first link that comes up via Google https://www.assetprotectionplanners.com ... -by-state/ and it lists "Yes" under "Roth IRA creditor protection?" for our state (and says No for California as you suggest in your post).
There may be limits on the amount of Roth protected. In some sites I see TX has limit of a number over $1 million.

I have seen argued in here by somebody who seemed knowledgeable on such matters that amounts rolled into IRAS from 401ks maintain protections of 401ks, even in CA. Honestly I don't know.
Thanks, look at the actual law for TX where I do reside https://statutes.capitol.texas.gov/Docs ... /PR.42.htm specifically "Sec. 42.0021" there are no limits of any kind expressed.
Sec. 42.0021. ADDITIONAL EXEMPTION FOR CERTAIN SAVINGS PLANS. (a) In this section, "qualified savings plan" means any stock bonus, pension, annuity, deferred compensation, profit-sharing, health, education, or similar plan or account, to the extent the plan or account is exempt from federal income tax or to the extent federal income tax on a person's interest in the plan or account is deferred until actual payment of benefits to the person. A plan or account that is subject to federal income tax is considered to be exempt from federal income tax for purposes of this section if the plan or account is subject to the tax solely under Sections 511 through 514, Internal Revenue Code of 1986. The term includes:

(1) a retirement plan sponsored by a private employer, government, or church;

(2) a retirement plan for self-employed individuals;

(3) a simplified employee pension plan;

(4) an individual retirement account or annuity, including an inherited individual retirement account or annuity;

(5) a Roth IRA, including an inherited Roth IRA;

(6) a health savings account;

(7) a Coverdell education savings account;

(8) a plan or account established under Subchapter F, Chapter 54, Education Code, including a prepaid tuition contract;

(9) a plan or account established under Subchapter G, Chapter 54, Education Code, including a savings trust account;

(10) a qualified tuition program of any state that meets the requirements of Section 529, Internal Revenue Code of 1986;

(11) a qualified ABLE program of any state that meets the requirements of Section 529A, Internal Revenue Code of 1986; and

(12) an annuity or similar contract purchased with assets distributed from a plan or account described by this subsection.

(b) In addition to the exemption prescribed by Section 42.001 and except as provided by this section, a person's interest in and right to receive payments from a qualified savings plan, whether vested or not, is exempt from attachment, execution, and seizure for the satisfaction of debts.

(c) An interest or right in a qualified savings plan that was acquired by reason of the death of another person, whether as an owner, participant, beneficiary, survivor, coannuitant, heir, or legatee, is exempt to the same extent that the interest or right of the decedent was exempt on the date of the decedent's death.

(d) Contributions to a qualified savings plan that are excess contributions under Section 4973, Internal Revenue Code of 1986, and any accrued earnings on such contributions are not exempt under this section unless otherwise exempt by law.

(e) Amounts distributed from a qualified savings plan are exempt from attachment, execution, and seizure for a creditor's claim for 60 days after the date of distribution. If the amounts qualify as a rollover contribution under the Internal Revenue Code of 1986, whether taxable or nontaxable, the amounts will continue to be exempt thereafter under this section.


(f) A person's interest in a retirement plan that is solely an unfunded, unsecured promise by an employer to pay deferred compensation is not exempt under this section unless otherwise exempt by law.

(g) A person is not prohibited by this section from granting a valid and enforceable security interest in the person's interest in or right to receive payments from a qualified savings plan to the extent permitted by, and in accordance with, the Internal Revenue Code of 1986 and the terms of the qualified savings plan to secure a loan to the person from the qualified savings plan. The person's interest in or right to receive payments from the plan is subject to attachment, execution, and seizure for the satisfaction of the security interest or lien granted by the person to secure the loan.

(h) If any provision of this section is held invalid or preempted by federal law, in whole or in part or in certain circumstances, the remaining provisions of this section remain in effect, to the maximum extent permitted by law.

(i) A reference in this section to the Internal Revenue Code of 1986 or a specific provision of the Internal Revenue Code of 1986 includes a subsequent amendment of that code or of the substance of that provision.
I bolded some interesting text. Specifically, I'm not sure how the text in (d) and (e) applies to CRD recontributions, and whether that qualifies as a "rollover" in the meaning of the text. However, it also doesn't seem to qualify as an "excess contribution," so my lay take would be that it would be protected for the full amount, but not 100% sure about this.

The $1 million amount you quoted seems, at least per Google, to be a FEDERAL amount protected by the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) https://rodgers-associates.com/blog/ret ... IRS%20levy https://www.investopedia.com/terms/b/bapcpa.asp.

Thanks again for the interesting insights and questions!
Thanks. I am TX also. I've never been exactly clear on these issues. Thus if I have a low cost good 401k, I keep it. Between my wife and I we have a half of dozen 401ks. Some here will say that is too complex. I don't find it to be complex at all.

One thing about good 401k plans is sometimes their fees will be lower, with institutional share rates, especially for target date funds. I have 401ks with target date expense ratios of 0.06-0.08%, vs individual vanguard investor shares of 0.15%.
Topic Author
need403bhelp
Posts: 1096
Joined: Thu May 28, 2015 6:25 pm

Re: Reason NOT to move $100k Roth 403b -> Roth IRA?

Post by need403bhelp »

JBTX wrote: Sat Oct 17, 2020 2:07 pm
need403bhelp wrote: Sat Oct 17, 2020 1:56 pm
JBTX wrote: Sat Oct 17, 2020 1:32 pm
need403bhelp wrote: Sat Oct 17, 2020 1:24 pm
JBTX wrote: Sat Oct 17, 2020 1:20 pm Only thing I can think of is 401ks (and presumably 403bs?) often have better liability / bankruptcy protections than Individual IRAs. This is heavily dependent on state law. It's a big advantage in CA. Somewhat less in states like TX which have decent IRA liability protection.

If I have a good cheap 401k plan with good options I tend to leave it there.
Thanks, that is a good point.

I checked the first link that comes up via Google https://www.assetprotectionplanners.com ... -by-state/ and it lists "Yes" under "Roth IRA creditor protection?" for our state (and says No for California as you suggest in your post).
There may be limits on the amount of Roth protected. In some sites I see TX has limit of a number over $1 million.

I have seen argued in here by somebody who seemed knowledgeable on such matters that amounts rolled into IRAS from 401ks maintain protections of 401ks, even in CA. Honestly I don't know.
Thanks, look at the actual law for TX where I do reside https://statutes.capitol.texas.gov/Docs ... /PR.42.htm specifically "Sec. 42.0021" there are no limits of any kind expressed.
Sec. 42.0021. ADDITIONAL EXEMPTION FOR CERTAIN SAVINGS PLANS. (a) In this section, "qualified savings plan" means any stock bonus, pension, annuity, deferred compensation, profit-sharing, health, education, or similar plan or account, to the extent the plan or account is exempt from federal income tax or to the extent federal income tax on a person's interest in the plan or account is deferred until actual payment of benefits to the person. A plan or account that is subject to federal income tax is considered to be exempt from federal income tax for purposes of this section if the plan or account is subject to the tax solely under Sections 511 through 514, Internal Revenue Code of 1986. The term includes:

(1) a retirement plan sponsored by a private employer, government, or church;

(2) a retirement plan for self-employed individuals;

(3) a simplified employee pension plan;

(4) an individual retirement account or annuity, including an inherited individual retirement account or annuity;

(5) a Roth IRA, including an inherited Roth IRA;

(6) a health savings account;

(7) a Coverdell education savings account;

(8) a plan or account established under Subchapter F, Chapter 54, Education Code, including a prepaid tuition contract;

(9) a plan or account established under Subchapter G, Chapter 54, Education Code, including a savings trust account;

(10) a qualified tuition program of any state that meets the requirements of Section 529, Internal Revenue Code of 1986;

(11) a qualified ABLE program of any state that meets the requirements of Section 529A, Internal Revenue Code of 1986; and

(12) an annuity or similar contract purchased with assets distributed from a plan or account described by this subsection.

(b) In addition to the exemption prescribed by Section 42.001 and except as provided by this section, a person's interest in and right to receive payments from a qualified savings plan, whether vested or not, is exempt from attachment, execution, and seizure for the satisfaction of debts.

(c) An interest or right in a qualified savings plan that was acquired by reason of the death of another person, whether as an owner, participant, beneficiary, survivor, coannuitant, heir, or legatee, is exempt to the same extent that the interest or right of the decedent was exempt on the date of the decedent's death.

(d) Contributions to a qualified savings plan that are excess contributions under Section 4973, Internal Revenue Code of 1986, and any accrued earnings on such contributions are not exempt under this section unless otherwise exempt by law.

(e) Amounts distributed from a qualified savings plan are exempt from attachment, execution, and seizure for a creditor's claim for 60 days after the date of distribution. If the amounts qualify as a rollover contribution under the Internal Revenue Code of 1986, whether taxable or nontaxable, the amounts will continue to be exempt thereafter under this section.


(f) A person's interest in a retirement plan that is solely an unfunded, unsecured promise by an employer to pay deferred compensation is not exempt under this section unless otherwise exempt by law.

(g) A person is not prohibited by this section from granting a valid and enforceable security interest in the person's interest in or right to receive payments from a qualified savings plan to the extent permitted by, and in accordance with, the Internal Revenue Code of 1986 and the terms of the qualified savings plan to secure a loan to the person from the qualified savings plan. The person's interest in or right to receive payments from the plan is subject to attachment, execution, and seizure for the satisfaction of the security interest or lien granted by the person to secure the loan.

(h) If any provision of this section is held invalid or preempted by federal law, in whole or in part or in certain circumstances, the remaining provisions of this section remain in effect, to the maximum extent permitted by law.

(i) A reference in this section to the Internal Revenue Code of 1986 or a specific provision of the Internal Revenue Code of 1986 includes a subsequent amendment of that code or of the substance of that provision.
I bolded some interesting text. Specifically, I'm not sure how the text in (d) and (e) applies to CRD recontributions, and whether that qualifies as a "rollover" in the meaning of the text. However, it also doesn't seem to qualify as an "excess contribution," so my lay take would be that it would be protected for the full amount, but not 100% sure about this.

The $1 million amount you quoted seems, at least per Google, to be a FEDERAL amount protected by the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) https://rodgers-associates.com/blog/ret ... IRS%20levy https://www.investopedia.com/terms/b/bapcpa.asp.

Thanks again for the interesting insights and questions!
Thanks. I am TX also. I've never been exactly clear on these issues. Thus if I have a low cost good 401k, I keep it. Between my wife and I we have a half of dozen 401ks. Some here will say that is too complex. I don't find it to be complex at all.

One thing about good 401k plans is sometimes their fees will be lower, with institutional share rates, especially for target date funds. I have 401ks with target date expense ratios of 0.06-0.08%, vs individual vanguard investor shares of 0.15%.
Thanks, I do see your point. I think I bolded the wrong section, I changed my bolding and now I think it is more clear (again, from https://statutes.capitol.texas.gov/Docs ... /PR.42.htm):
Sec. 42.0021. ADDITIONAL EXEMPTION FOR CERTAIN SAVINGS PLANS. (a) In this section, "qualified savings plan" means any stock bonus, pension, annuity, deferred compensation, profit-sharing, health, education, or similar plan or account, to the extent the plan or account is exempt from federal income tax or to the extent federal income tax on a person's interest in the plan or account is deferred until actual payment of benefits to the person. A plan or account that is subject to federal income tax is considered to be exempt from federal income tax for purposes of this section if the plan or account is subject to the tax solely under Sections 511 through 514, Internal Revenue Code of 1986. The term includes:

(1) a retirement plan sponsored by a private employer, government, or church;

(2) a retirement plan for self-employed individuals;

(3) a simplified employee pension plan;

(4) an individual retirement account or annuity, including an inherited individual retirement account or annuity;

(5) a Roth IRA, including an inherited Roth IRA;

(6) a health savings account;

(7) a Coverdell education savings account;

(8) a plan or account established under Subchapter F, Chapter 54, Education Code, including a prepaid tuition contract;

(9) a plan or account established under Subchapter G, Chapter 54, Education Code, including a savings trust account;

(10) a qualified tuition program of any state that meets the requirements of Section 529, Internal Revenue Code of 1986;

(11) a qualified ABLE program of any state that meets the requirements of Section 529A, Internal Revenue Code of 1986; and

(12) an annuity or similar contract purchased with assets distributed from a plan or account described by this subsection.

...
So my lay person's take on it would be that as long as the re-contributed CRD amounts are still exempt from federal income tax (which they are), they would still be exempt from creditors under this code.

FWIW, I don't use target date funds any longer as I have a complex web of investments across TIAA, Fidelity, and Vanguard for which I have a rather complex re-balancing spreadsheet (which, thankfully, makes the rebalancing pretty easy & automatic but I do have to re-check it once in a while). Also, our target date funds within the 403b are not optimal as they only have the active ones, but there is a BrokerageLink option (which I don't use) to get the target date index funds.

My main reason to transfer would really be go to get Platinum Honors at Merrill Edge, and I'd like to do so under DW's name as I feel that I have more credit built up than her.

Also, I think part of me does want to "benefit" somehow from the adverse financial consequences we experienced, so I think that is part of the emotional component of this.
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F150HD
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Re: Reason NOT to move $100k Roth 403b -> Roth IRA?

Post by F150HD »

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Alan S.
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Re: Reason NOT to move $100k Roth 403b -> Roth IRA?

Post by Alan S. »

Should a plan loan ever be useful to you, your 403b provides such loans, and your balance dropped low enough to restrict the loan amount.
Topic Author
need403bhelp
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Re: Reason NOT to move $100k Roth 403b -> Roth IRA?

Post by need403bhelp »

Alan S. wrote: Sat Oct 17, 2020 6:54 pm Should a plan loan ever be useful to you, your 403b provides such loans, and your balance dropped low enough to restrict the loan amount.
Thanks, that is very helpful.

As far as I can tell (reading plan docs and also going to 457b website and trying to initiate process), I can still take a loan out of my 457b in this case.

It is a bit confusing because our employer's "cheat sheet" seems to suggest in parts of it that "hardship loans" are taken from 403b and "unforeseeable emergency" ?loans are taken from 457b, but this doesn't seem to be the case in other parts of the same document. Also, I don't see anything about the specific conditions for the loan in the plan documents themselves, which rather seem to focus on the mechanics of the loan itself (max loan amount, interest rate, repayment, default, etc.).

Also, as far as F150HD's deleted question, I have no idea how to approach IRA protection from creditors in the case where one works in state A and lives in state B.

EDIT: I re-read the "cheat sheet" and I think I missed a big point. There are 3 separate entities:

1. Plan loans. These can be taken from both 403b and 457b accounts, except from the "mandatory" portion.
2. Hardship withdrawals. These can only be taken from 403b.
3. Unforeseen emergency withdrawals. These can only be taken from 457b.
Last edited by need403bhelp on Sun Oct 18, 2020 6:08 pm, edited 1 time in total.
lakpr
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Re: Reason NOT to move $100k Roth 403b -> Roth IRA?

Post by lakpr »

need403bhelp wrote: Sun Oct 18, 2020 12:53 pm Also, as far as F150HD's deleted question, I have no idea how to approach IRA protection from creditors in the case where one works in state A and lives in state B.
I have not seen the question, only your reference above, but I believe the laws of the state where one LIVES apply. I live in NJ, but work in New York City, and this question directly applies to me. The I in the IRA stands for Individual; by extension, the laws of the state where an Individual lives, not the state where an Employer resides, apply.
Topic Author
need403bhelp
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Joined: Thu May 28, 2015 6:25 pm

Re: Reason NOT to move $100k Roth 403b -> Roth IRA?

Post by need403bhelp »

lakpr wrote: Sun Oct 18, 2020 2:33 pm
need403bhelp wrote: Sun Oct 18, 2020 12:53 pm Also, as far as F150HD's deleted question, I have no idea how to approach IRA protection from creditors in the case where one works in state A and lives in state B.
I have not seen the question, only your reference above, but I believe the laws of the state where one LIVES apply. I live in NJ, but work in New York City, and this question directly applies to me. The I in the IRA stands for Individual; by extension, the laws of the state where an Individual lives, not the state where an Employer resides, apply.
Thanks, that does make a lot of sense.
tomsense76
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Re: Reason NOT to move $100k Roth 403b -> Roth IRA?

Post by tomsense76 »

One thing that might be worth looking into is whether the plan supports in-service after-tax withdrawals. Not all plans allow this, but some do. This would allow one the same kind of move to a Roth IRA as proposed, but would work regardless of circumstances. Would save a bit on paperwork.

https://thefinancebuff.com/in-service-w ... rules.html
Topic Author
need403bhelp
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Joined: Thu May 28, 2015 6:25 pm

Re: Reason NOT to move $100k Roth 403b -> Roth IRA?

Post by need403bhelp »

tomsense76 wrote: Sun Oct 18, 2020 5:22 pm One thing that might be worth looking into is whether the plan supports in-service after-tax withdrawals. Not all plans allow this, but some do. This would allow one the same kind of move to a Roth IRA as proposed, but would work regardless of circumstances. Would save a bit on paperwork.

https://thefinancebuff.com/in-service-w ... rules.html
Thanks. The good thing about our employer (government entity) is between mandatory contributions to 403b and voluntary contributions to 403b and 457b, I am actually able to max out both entities ($57k to 403b plus $18.5k to 457b). So even if our plan allowed after-tax contributions (which it doesn't, as I believe these are different from Roth contributions) and in-service withdrawals (which it doesn't last I checked), I don't believe I would be able to take advantage of this.

Thanks for sharing your idea!
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