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401k Rollover To 457b


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#1 Guy

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Posted 03 May 2007 - 07:01 PM

Hello,

I am brand new to this forum and am looking for some help.
My question is, can I roll my 401k to a 457b and then pull money out without the 10% penalty before age 59 1/2?

I am a Federal retiree and have a Thrift savings plan (TSP) which I am told is like a 401k, I started putting money in the TSP in 1985, and I am under the Rederal Retirement System (FERS). I just got a new job that offers a 457b with TIAA CREF. I'm thinking about rolloing over my TSP into the 457b and start taking money out in 10 years, age 58, only if I can do it without incuring the 10% penalty.

Is this possible or a pipe dream?

thanks, Guy

#2 John Feldt

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Posted 04 May 2007 - 08:51 AM

The pipe dream portion:
You cannot avoid the early distribution rules by rolling over the money to a plan that is not subject to the early distribution rules! If the plan is administered properly, the rollover will be accounted for separately within the plan and it will still be subject to the rules regarding early withdrawal penalties.

The possible portion:
However, the 10% penalty does not apply if you separate from service after age 55 and, after such separation, you take your withdrawal. How about that?

#3 Guy

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Posted 05 May 2007 - 12:47 PM

QUOTE(John Feldt @ May 4 2007, 06:51 AM) View Post

The pipe dream portion:
You cannot avoid the early distribution rules by rolling over the money to a plan that is not subject to the early distribution rules! If the plan is administered properly, the rollover will be accounted for separately within the plan and it will still be subject to the rules regarding early withdrawal penalties.

The possible portion:
However, the 10% penalty does not apply if you separate from service after age 55 and, after such separation, you take your withdrawal. How about that?


I seperated from civil service last Dec. the TSP funds are from that. If I roll over TSP to 457b now at age 48, seperate from current job at 58, wouldn't that money be treated as the original TSP rule?

Guy

#4 Guest_Sierra_*

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Posted 06 May 2007 - 11:13 AM

QUOTE(Guy @ May 3 2007, 08:01 PM) View Post

Hello,

I am brand new to this forum and am looking for some help.
My question is, can I roll my 401k to a 457b and then pull money out without the 10% penalty before age 59 1/2?

I am a Federal retiree and have a Thrift savings plan (TSP) which I am told is like a 401k, I started putting money in the TSP in 1985, and I am under the Rederal Retirement System (FERS). I just got a new job that offers a 457b with TIAA CREF. I'm thinking about rolloing over my TSP into the 457b and start taking money out in 10 years, age 58, only if I can do it without incuring the 10% penalty.

Is this possible or a pipe dream?

thanks, Guy


Guy: What do you feel are the defects of the TSP inasmuch as you are thinking of rollover over your money at the ripe old age of 48? You can't beat the TSP if you are looking for basic asset allocation via Target Date Funds. But I trust you already know that.

Joel


#5 John Feldt

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Posted 07 May 2007 - 08:28 AM

Guy,

Okay, you are no longer with the employer who participates in the TSP.

So, yes, the TSP funds, when (if) rolled to the 457(b) plan, will still be subject to the 10% early distribution rules if withdrawn before age 59 1/2 (if the 457b plan is administered properly). The age 55 exception would not apply because your employment ended with the TSP plan's employer before you reached age 55.

The account attributable to your 457(b) annual deferrals will not be subject to the 10% penalty if withdrawn before 59 1/2.

#6 Guy

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Posted 11 May 2007 - 07:01 AM

QUOTE(John Feldt @ May 7 2007, 06:28 AM) View Post

Guy,

Okay, you are no longer with the employer who participates in the TSP.

So, yes, the TSP funds, when (if) rolled to the 457(b) plan, will still be subject to the 10% early distribution rules if withdrawn before age 59 1/2 (if the 457b plan is administered properly). The age 55 exception would not apply because your employment ended with the TSP plan's employer before you reached age 55.

The account attributable to your 457(b) annual deferrals will not be subject to the 10% penalty if withdrawn before 59 1/2.


This is what I thought..Thank You!
Guy

QUOTE(Sierra @ May 6 2007, 09:13 AM) View Post

QUOTE(Guy @ May 3 2007, 08:01 PM) View Post

Hello,

I am brand new to this forum and am looking for some help.
My question is, can I roll my 401k to a 457b and then pull money out without the 10% penalty before age 59 1/2?

I am a Federal retiree and have a Thrift savings plan (TSP) which I am told is like a 401k, I started putting money in the TSP in 1985, and I am under the Rederal Retirement System (FERS). I just got a new job that offers a 457b with TIAA CREF. I'm thinking about rolloing over my TSP into the 457b and start taking money out in 10 years, age 58, only if I can do it without incuring the 10% penalty.

Is this possible or a pipe dream?

thanks, Guy


Guy: What do you feel are the defects of the TSP inasmuch as you are thinking of rollover over your money at the ripe old age of 48? You can't beat the TSP if you are looking for basic asset allocation via Target Date Funds. But I trust you already know that.

Joel


I have no problem with the TSP, I was looking for a way to withdraw money before age 59-1/2 and not get blasted with the 10% penalty Tax.

Guy