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April 10, 2009

Can I rollover my IRA to my 403(b) so as not to take RMD amounts?

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Can I rollover my IRA to my 403(b) so as not to take RMD amounts?

QuestionI am 71 years old and participate in a http://retirementdictionary.com/definitions/403bplan 403(b) plan that is sponsored by an employer which I still work for. I would like to defer taking distributions until I retire. Can I http://retirementdictionary.com/definitions/rollovercontribution rollover my http://retirementdictionary.com/definitions/traditionalira traditional IRA to my 403(b) account and defer taking http://retirementdictionary.com/definitions/requiredminimumdistributionrmd required minimum distributions (RMD) from the entire account, including the amount rolled over from the IRA?

Answer

Yes, providing the 403(b) plan permits such rollovers. Since you are still employed by the 403(b) sponsor, you need not take RMD amounts from the 403(b) account until you retire. If you rollover your traditional IRA to your 403(b) account, the IRA amount will be subject to the same provisions.

Caution:

• If you are http://retirementdictionary.com/definitions/70andhalfage 72 this year, then you must take your RMD for this year from the traditional IRA before completing the rollover.
• Only the pre-tax amounts held in the Traditional IRA can be rolled over. Any http://retirementdictionary.com/definitions/aftertaxcontributions after-tax amounts in the traditional IRA cannot be rolled over to your 403(b). The sources of after-tax amounts are http://retirementdictionary.com/definitions/nondeductiblecontribution nondeductible contributions to the http://retirementdictionary.com/definitions/ira IRA and rollover of after-tax amounts from http://retirementdictionary.com/definitions/qualifiedretirementplan qualified plans and 403(b) accounts
• Amounts that are not eligible to be credited to the IRA cannot be rolled over. For instance any http://retirementdictionary.com/definitions/excesscontribution excess contributions made to the IRA cannot be rolled over

Question answered by http://deniseappleby.com/ Denise Appleby

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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