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Can I do "in-service" distribution/transfer to IRA to wrest control from Valic?

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I stumbled on an article about how the new tax law may affect me (https://www.madfientist.com/new-tax-law ) and saw info on the "Mega Backdoor Roth," but it references 401ks and not 403bs.  I'm sure I'll have to talk to Valic, which I dread, to confirm -- but it sure sounds like (if my plan allows) I could do "in-service distributions" from my 403b into my Vanguard Traditional IRA, where I have lower expenses and fees, and more choices and control.  I would potentially gain the higher contribution limits of my Valic 403b into my the Vanguard IRA which has quite low tax-deferred contribution limits.

Is anyone here doing this already?

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Hi too tried this. I heard about it from the Mad Fientist podcast and called about it. It seems few 401k plans allow it and certainly not our 403b (Aspire). It is something private companies would intentionally offer to be competitive. 

Good question though, and great concept. Maybe someone here has had a different outcome.

Good luck with that phone call. You never know!

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I just did a quick reread of your previous thread: http://board.403bwise.com/topic/6169-maxed-out-iras-not-a-great-403b-provider-available/
I don’t think the after-tax (non-Roth) mega backdoor Roth is available to you or K-12 403b investors. It’s frequently not available to employees with a 401k plan. When it is available, I think it requires making the full 18.5k employee contribution before doing the after-tax contribution. I’ve never heard of a generic K-12 403b making this available. 

As I mentioned in your other thread, if you want tax-deferment, you should max out your tIRA first, possibly your DH’s tIRA second, and then third contribute to your traditional 403b plan. Although you will have to make do with VALIC’s cost of about 1.0%, this might be better than saving in a taxable account. You can contribute up to 18.5k plus 6k over 50 catch-up in your 403b. You can also contribute the same amount to VALIC’s 457. Maybe a combination of saving half in a low-cost taxable account and half in the 403b might work for you? 

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krow36, thanks for doing the research on my previous posts.  I'm not sure, though, why you think I want to do an after-tax mega backdoor Roth.  I want to do it Pretax/tax-deferred.  I would love to be able to do the full 18,500 employee contrib pretax, plus my $6K catch-up pretax -- and then, perhaps ANNUALLY until I actually retire, roll that into my Vanguard Traditional IRA, so I can better control my fees and allocations.  I realize that I'll pay SOME fees to Valic, but would like to escape them as quickly as possible.

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You mentioned a "Mega Backdoor Roth" and also “"in-service distributions" from my 403b”. The mega backdoor Roth only works with after-tax (non-Roth) contributions (allowed in some 401k plans). So not only is it not an option available to you, it doesn’t involve a pre-tax contribution and that is what you want to increase, in order to decrease your current income tax.

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“I would love to be able to do the full 18,500 employee contrib pretax, plus my $6K catch-up pretax -- and then, perhaps ANNUALLY until I actually retire, roll that into my Vanguard Traditional IRA, so I can better control my fees and allocations.  I realize that I'll pay SOME fees to Valic, but would like to escape them as quickly as possible.”

You are not allowed to move your 403b investments to your Vanguard tIRA until you quit your employer, or are age 59.5. That’s the law. Are you 59.5? If not, I think you are stuck with the VALIC funds and fees unless you can talk your district into adding a lower cost provider. I suspect that you overly focused on VALIC’s higher fees, at the expense of the importance of contributing more to your tax-deferred 403b. Contributing more will reduce your taxable income and reduce your income tax. When you use the 403b money in retirement, you will probably be in a lower income tax bracket. It’s usually a good idea to postpone paying taxes if they are likely to be lower in the future.
 

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