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You can make a 403b rollover to IRA of the traditional type, without incurring extra income taxes this year. But, when it comes to converting a 403b rollover to Roth IRA funds, you will probably incur additional taxes this year. Here’s what you need to think about. 403b Rollover to IRA, Traditional If you currently have a 403-b, you may be a teacher, a minister or employed by a non-profit organization. Your contributions to the plan were made by salary deferrals, which decreased your annual earnings and your annual income taxes. Traditional accounts are funded in a similar fashion, either using salary deferrals or with “self-made” contributions that are tax deductible. Maximum annual contributions of this type vary from year to year. In 2008, for example, a person aged 49 or under can contribute $5000 and deduct that contribution from his or her income taxes. So, since both the 403-b and the traditional account are funded in similar manners, transferring a 403b rollover to IRA will not increase your tax bill for the year, as long as the roll-over is conducted properly. 403b Rollover to Roth IRA Contributions to Roth accounts are taxed as regular income for the year that they are made. Qualified distributions, however, are not taxed. A person that makes $100,000 per year or less can is allowed to convert a 403b rollover to Roth IRA, but the entire account value will be taxed as regular income during the year that the conversion was made. This could put you into a higher tax bracket and decrease your refund or increase your tax bill for the year. Other Choices It is possible to do a partial 403b rollover to Roth IRA, at this time, and then convert the rest of the fund to a traditional account. When conducted gradually, over a period of several years, it is possible to make a 403b rollover to Roth IRA, without changing your tax bill, much, if any, at all. A Little Advice Whether you decide that a 403b rollover to IRA is the best choice, or you choose to go with a 403b rollover to Roth IRA, now is the time to figure out how much money you need to retire at age 60. You have to consider that many of us will live another 40 years, beyond that age. You also have to think about your health and the extra medical bills that older folks sometimes have. I recently read a report about a man that had to go back to work at age 70, because they could not afford to pay for prescription drugs and other health care costs. At one time, the goal was an account worth a million dollars. We may need to rethink that, and strive for several million. You can’t do that with the average investment choices that custodial companies offer. You can do it with real estate. Before you make your 403b rollover to IRA, learn more about your investment options. Double Your ROI (Return On Investment) We are offering a real estate investment package where your ROI is guaranteed to be at least double what you earned last year in your traditional investments such as stocks, bonds and mutual funds etc. Yes, at least double what you earned last year. If you don't earn at least double returns from the community investments we are involved in, we will pay it ourselves. That is the guarantee. Please spend a few minutes and check out this investment, you will be very glad you did. Gordon Hall is an active participant of a national network of professional writers, who advocate socially conscious real estate investing, through the use of retirement vehicles such as IRAs, 401Ks and other retirement assets. For more information, or to get involved, please visit the following http://www.double-your-ira.com
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403b rollover to IRA, 403b rollover to Roth IRA,
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