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Roll Out Roth Funds from Co-Mingled 403b?

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My employer's 403b allows participants to contribute as either tax deferred and/or after-tax (Roth) contributions. But the funds do end up in the same 403b contract - e.g. 'co-mingled'. There is a screen that shows how much was contributed pre-tax and after tax Roth - but not the associated earnings.

After separating or retiring - is it possible to roll out or transfer just the Roth contributions (and associated earnings) into a separate personal Roth account at TIAA or elsewhere like Vanguard? And leave behind just the pre-tax contributions?

 

Thanks,

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Participant ○

Re: Roll Out Roth Funds from Co-Mingled 403b?

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Yes, I've done it twice--once for myself and once for my wife.

If you are talking about TIAA, they will send you downloadable forms--about 10 pages total.  You print them, fill them out, and then copy them with your phone and upload them to TIAA's app.  I am old and tech impaired, but even I had little trouble doing it.  The rollovers went to our Roth IRA accounts at Vanguard.

You will have to be 59.5 years old or separated from your employment--I believe.  We were still employed but in our 60s.  We had quit making Roth contributions when we did the rollovers.

John

PS You use the TIAA app both to copy and to upload the forms that you have filled out.

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Participant ○

Re: Roll Out Roth Funds from Co-Mingled 403b?

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Yes, I've done it twice--once for myself and once for my wife.

If you are talking about TIAA, they will send you downloadable forms--about 10 pages total.  You print them, fill them out, and then copy them with your phone and upload them to TIAA's app.  I am old and tech impaired, but even I had little trouble doing it.  The rollovers went to our Roth IRA accounts at Vanguard.

You will have to be 59.5 years old or separated from your employment--I believe.  We were still employed but in our 60s.  We had quit making Roth contributions when we did the rollovers.

John

PS You use the TIAA app both to copy and to upload the forms that you have filled out.

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Follower ○○

Re: Roll Out Roth Funds from Co-Mingled 403b?

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Great. So it sounds like I can indeed roll out just the after-tax Roth portion and associated earnings (while leaving all the pre-tax contributions and earnings alone)

Thanks,

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Re: Roll Out Roth Funds from Co-Mingled 403b?

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Just to add to what @jjustice said:

IRS allows both methods - sponsors can use separate accounts for pre-tax 403b and after-tax Roth 403b, or use a single account but track 403b and Roth 403b contributions within it. The earnings are allocate proportionately, so you can also estimate 403b and Roth 403b parts, but when the times comes, it is best to ask the 403b sponsor about certifiable Roth 403b part. 

You will also have to open a blank Roth IRA to receive funds, or use an existing Roth IRA.

Actions for 403b are originated with the 403b sponsor, and often a 3-way teleconference [403b sponsor, you, target R-IRA sponsor] is the best way to start. This is different for IRA rollovers/direct-transfers where the action can originate at the target IRA.

YBB
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Re: Roll Out Roth Funds from Co-Mingled 403b?

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I've rolled Roth funds out of a co-mingled 403b account twice--and out of a co-mingled 457 account once.  

The 403b transfers were internal (TIAA 403b to a TIAA Roth; Fidelity 403b to a Fidelity Roth).  The 457 transfer was company to company: Great Western to Vanguard.  In all three cases, everything worked smoothly.  I simply called the companies, and they told me what to do and what paperwork was needed.

I separated out the co-mingled funds in order to lower my RMDs.  When pre- and post-tax (Roth) money is co-mingled, you pay an RMD based on the total amount, including the Roth money.  Separating out the Roth money thus reduces the amount of your RMD.

One thing to keep in mind: In some cases (a transfer from one company to another), the process can take a long time, and during that time the market can fall (good) or rise (bad).

 

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