Reply To: leaving job, now what with 403(b)

Home Fairmark Forum Retirement Savings and Benefits leaving job, now what with 403(b) Reply To: leaving job, now what with 403(b)

Alan S.

She should determine the quality of her new employer plan before deciding what to do with the old 403b. If she wants the most autonomy for choosing investments, she would do a direct rollover to an IRA at the custodian of her choosing. But if her new plan offers good, low cost investment choices, she might instead roll the 403b into the new plan by direct rollover. She can still make investment changes with reasonably frequency in the new plan in most cases, but perhaps not as often and not as many choices as in an IRA. IF she lives in CA or one of the other states that do not provide good creditor protection for IRAs, she might favor the new plan or keep the 403b in place to get ERISA protection. Some 403b plans are not ERISA plans however, so if she keeps it in place she should determine if the 403b is an ERISA plan or not.

If she retains the 403b, she can also move it at a later date, but if the balance is under 5000, the plan can require her to move it sooner.

Finally, you are correct that she could not have taken an in service distribution from the 403b while employed and under 59.5 unless the plan offered hardship distributions or loans.