I don’t know a thing about you but I bet that the current economic crisis has got you worried about your retirement plans. Since the social security system will probably fall apart by the time a lot of us retire, we have to rely on our retirement savings in order to retire comfortably. If you are working with an organization in the public education field, a non-profit organization, or ministry, you probably have a 403b plan. There are many disadvantages to 403b plans so the best option available to you is to do a 403b rollover to IRA.
Here are 5 important to rules to remember so you can make a smooth transition.
1. A 403b rollover to Roth IRA has to be completed by the 60th day after you receive a distribution. If you hold onto the money past the 60th day, you can incur large tax penalties. The IRA sometimes makes exceptions to this 60 day rule in the case of unforeseen hardships and circumstances.
2. When you do a 403b rollover to IRA, you can have the distributions made out directly to you or to your new retirement plan. If you want to receive the distribution directly, some withholding rules will apply. Generally you will be penalized and made to pay 20% in taxes.
3. By having your plan administrator write a check to your new account custodian you can do a direct 403b rollover to Roth IRA without getting charged 20% in taxes. Your best bet will be to find a company set up to help people roll over and self-direct their IRA accounts.
4. While it is possible to do a 403b rollover to IRA directly, keep in mind that in some cases you may have to include some of the amounts in taxable income and that a 403b cannot be rolled over into a simple IRA.
5. If you want to have a wider array of investment options such as real estate, foreign currency, oil and gas properties, raw land, etc., you have to do a 403b rollover to Roth IRA. 403b plans limit you from investing in a wide variety of assets. Generally, you are only allowed to invest in annuity contracts and mutual funds. With a self-directed Roth IRA you have a much wider range of investment options thus many more opportunities to increase your returns. Real estate is known to be the hands down best Roth IRA investment because of its stability, low risk, and potential for high returns.
In conclusion, there are lots of rules and regulations you need to consider before doing a 403b rollover to IRA.
Rolling over is the best option available if you want more flexibility and increased returns.
However, in order to avoid incurring penalties and losses, make sure you find a company that can help you make a smooth transition and invest your self-directed IRA in real estate.
To learn more so you can avoid problems and maximize your investment returns with ease visit my website today.