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March 3, 2020

Can I rollover amounts from my 401(k) or 403(b) to my IRA?

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Can I rollover amounts from my 401(k) or 403(b) to my IRA?

Assuming I am eligible to make withdrawals from my qualified plan or 403(b) account, can I rollover the withdrawn amounts to my IRA?

It depends. Your may roll over your 401(k) distribution to your IRA, if the receiving IRA is a Traditional (including a SEP) IRA, or a Roth IRA[i]. These amounts may also be rolled over  to a SIMPLE IRA if the SIMPLE IRA has been funded for at least two years. In addition, the amount must be rollover eligible. The following are examples of amounts that are not rollover eligible:

Note: Amounts rolled over to your Roth IRA is treated as ordinary income for the year the distribution occurs. On the other hand, a rollover to a traditional IRA is not included in income.

Caution: If you have employer stocks in your qualified plan account, check with your financial or tax professional to determine whether those amounts should be rolled over. The NUA on employer stocks are eligible for special tax treatment if certain requirements have been met.

Please consult with your financial advisor or tax professional regarding your distribution and rollover.

[i] Prior to 2008, amounts could not be rolled over from a qualified plan or 403(b) to a Roth IRA. However, the Pension Protection Act of 2006 (PPA), changed that rule effective for distributions that occur 2008 and after.

Written By

Denise Appleby

Denise is CEO of Appleby Retirement Consulting Inc., a firm that provides IRA resources for financial/ tax/legal professionals. She has over 20 years of experience in the retirement plans field, which includes training and technical consultation.

Denise writes and publishes educational /marketing tools for advisors; available at http://irapublications.com. Denise co-authored several books on IRAs

Denise is a graduate of The John Marshall Law School, where she obtained a Masters of Jurisprudence in Employee Benefits, and has earned 5 professional retirement designations.
She has appeared on numerous media programs, sharing her insights on retirement tax laws.

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