Questions about tranferring IRA from one Institution to another Institution

[mcwjjm]

What is the name of your state (only U.S. law)?Ohio

When I retired @ age 55 I established two IRAs; 403b and 457. The 403b had the higher return, 4% vs 3%. I put as much as I could in the 403b. Unfortunately, ING won't do an internal transfer of the two accounts. So I want to transfer the $16,000 in the 457 to another IRA and then transfer as much as I can [$6500?] annually back into my ING 403b. I retired from a school retirement system that allows you to withdraw without penalty from your IRA as long as you're 55 or older the calender year you retire.

I've already spoken with my ING rep and he's cool with it. I've made an appointment with my bank about the IRA transfer. I understand these transactions can be problematic if it's not handled correctly. I've never done this before, what questions should I ask the bank? And what details should I look out for? I believe the bank does not have any exit or transfer fees. Thanks in advance.

 

[anteater]

When I retired @ age 55 I established two IRAs; 403b and 457.

Which is it? Two IRA's? Or a 403(b) plan and a 457 plan? Did you rollover the 403(b) and 457 into IRA's?

 

[mcwjjm]

Which is it? Two IRA's? Or a 403(b) plan and a 457 plan? Did you rollover the 403(b) and 457 into IRA's?

It was a plop sum + buy out + vacation / sick leave that took effect upon my retirement.

 

[LdiJ]

It was a plop sum + buy out + vacation / sick leave that took effect upon my retirement.

An IRA and a 403(b) are two different things. An IRA and a 457 are two different things.

Either one of those plans could have been rolled over/converted to an IRA at the time you retired, but you have not been at all clear on that issue.

 

[mcwjjm]

An IRA and a 403(b) are two different things. An IRA and a 457 are two different things.

Either one of those plans could have been rolled over/converted to an IRA at the time you retired, but you have not been at all clear on that issue.

You are correct. Neither the 403 or 457 were converted to an IRA. What confused me is that my ING rep specifically told me to transfer the smaller of two accounts [the one with the lower return] to an IRA.

My question, can I do what I asked in my OP? Move the funds from the 457 to an IRA and then transfer it back to my 403 which is giving me a larger return? Sorry about the confusion.

 

[tranquility]

You are correct. Neither the 403 or 457 were converted to an IRA. What confused me is that my ING rep specifically told me to transfer the smaller of two accounts [the one with the lower return] to an IRA.

My question, can I do what I asked in my OP? Move the funds from the 457 to an IRA and then transfer it back to my 403 which is giving me a larger return? Sorry about the confusion.

http://www.irs.gov/pub/irs-tege/rollover_chart.pdf

 

[mcwjjm]

Thanks for the link tranquility!

 

[mcwjjm]

Met with my banker today and while he confirmed I'm able to move the funds we discovered that due to the "surrender" restrictions on the 403 I really don't want to do that. It seems I can withdraw w/o penalty from the 457 but if I were to do so on the 403 I would be hit with the 10% IRS penalty in addition to the 5% "surrender" fee from ING. The rep strongly advised me not merge the 457 into the 403 since that would give me less flexibilty. The "surrender fee" contract is 10 years though the penalty is reduced over time.

 

[tranquility]

All 403(b) contracts are different.

 

[mcwjjm]

NEW Question - Should I switch my "Broker of Record" to my bank?

The investment advisor from the bank called back and explained that while there was nothing he could do about the structure of the "surrender fee" on the 403 one option was to make the bank the "Broker of Record". I would still have the ING account, could withdraw from either institution but the assets of the 457 and 403 would appear on my bank statement and while that wouldn't affect my credit rating * it could potentially be helpful should I apply for a major purchase; auto / home. Unfortunately, that would be the only advantage - same fees, if any, would still apply.

My question, is what my banker is telling me correct? And if so, is there any reason I shouldn't make the bank the "Broker of Record"? Not too thrilled with my ING rep after he made it seem that since I retired @ 55 I could have access to both accounts w/o penalty. Thanks in advance.

* True?