3 Steps To Rollover PERS or 403b Into IRA

3 Steps To Rollover PERS or 403b Into IRA

If you’re wanting to move your money from a 403 (b) plan to a traditional IRA, you could utilize tax-sheltered growth of your retirement savings and investment options.

With an IRA you can invest in just about anything as long as it’s not a collectible item, like art, and you’re not personally benefiting from it, like a vacation home. You should consider rolling over your 403(b) plan to an IRA after you’ve left the job, however (plus, you must be under 59 ½ years old).

Step 1

Complete a 403(b) plan withdrawal request form, and request a distribution from your 403 (b). During this step, you’ll need to provide private information about yourself, like bank account information, name, and the amount you want to take out. 

Step 2

Deposit the amount you withdrew into your IRA account before 60 days pass, in order to complete the rollover. Remember that your 403(b) plan withdrawal will have 20 percent withhold for federal income taxes, so make sure you save that money in a checking account or similar. 

According to Nest.com, For example, say you want to roll over $10,000. When you take a $10,000 distribution, you receive $8,000, and $2,000 is withheld for federal income taxes. If you only redeposit the $8,000, the IRS treats you as if you withdrew $2,000.

Step 3

Reporting the rollover on your income tax return is an important step you cannot miss!  The amount of the distribution appears as non-taxable pension and annuity distribution on line 16a of Form 1040 or line 12a of Form 1040A. As long as you complete the rollover, report $0 on line 16b of Form 1040 or line 12b of Form 1040A and “rollover” next to the line.

Get 403b or PERS Help From National Educational Services

Understanding your retirement plan can be confusing, let us help you figure it out! We’re here to help you every step of the way until you take the dive into retirement. 

Contact National Educational Services today to get 403b or PERS help.

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