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457 Steve

Govt. 457B To Traditional Ira

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Greetings all,

 

I am new to this site, have worked my way through most of the topics, and am duly impressed with the collective wisdom. I would appreciate any comment on the following situation:

 

I am recently retired with the majority of my retirement funds in a 457b govt. with the Hartford. One plus is that they currently offer 4% in their fixed income fund. The downside is that there is no brokerage option, so I am limited to various mutual funds. At present, these can be "traded" to a degree, because I can move in and out online - provided I don't exceed 20 moves a year - and provided I can be content with these "trades" being effective only at the close of a market day. For my purposes, I would rather be able to trade my 457 funds out of a brokerage account - my target here would be ETF's more than individual stocks.

 

I have checked with Hartford, and it seems I can do a direct rollover from the 457 to my existing traditional IRA brokerage account. I have no thoughts about withdrawing prior to 59.5, so that is not an issue. The brokerage tells me that once the rollover is done, the 457 $$ simply merge with the existing IRA balance with no other consequences.

 

Since this is a "once it's done, it's done" deal, I want to make sure I'm not missing anything - either legal, tax, financial or otherwise. I'd appreciate any thoughts.

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The advice seems sound to me. It sounds like you want to do a lot of trades, or very frequent trading?

 

The firm I work with also provides service for employers that have defined benefit plans. As an internal joke, if a doctor's or lawyer's or dentist's defined benefit plan becomes overfunded (beyond the maximum that can be paid out), we jokingly suggest that the investment advisor should allow the doctor/lawyer/dentist to start doing their own day-trading with the plan assets, and that should fix the plan's overfunding problem in about a week. After they stop laughing, we suggest a real solution of course.

 

Thought you might enjoy that! - Have a great Thanksgiving.

-John

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The advice seems sound to me. It sounds like you want to do a lot of trades, or very frequent trading?

 

The firm I work with also provides service for employers that have defined benefit plans. As an internal joke, if a doctor's or lawyer's or dentist's defined benefit plan becomes overfunded (beyond the maximum that can be paid out), we jokingly suggest that the investment advisor should allow the doctor/lawyer/dentist to start doing their own day-trading with the plan assets, and that should fix the plan's overfunding problem in about a week. After they stop laughing, we suggest a real solution of course.

 

Thought you might enjoy that! - Have a great Thanksgiving.

-John

 

 

Yep, there's a good ring of truth to that. I think the lawyers are best at it, but not by much. I don't day trade. I do my best to time the market, though, and what's been getting me, especially of late, is watching things go sour overnight or the next morning and then having to wait until the end of the day to get out (or in, as the case may be). I have yet to hit my Hartford limit of 20 trades a year, but I sure can remember some days I wished I could have moved in or out before the day was over; and I expect the volatility we're seeing will be with us for some time. Enjoy your holiday as well!

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