403(b) and 72(t)
L1: 403(b) and 72(t)Hello,
Can you set up a 72(t) out of a 403(b).
Maverick2010-08-06 15:27, By: Maverick, IP: [18.104.22.168]
L2: 403(b) and 72(t)If you are > 55, or wil be by 12/31, and “separate from service in 2010, then you do not have to set up a SEPP 72-T. 403-b has the same provision as 401-k to avoid the 10% penalty.
Otherwise, SEPP 72-T can only be set up from one or more IRA accounts. You would have to rollover by trustee to trustee transfer from your 403-B (or 401-k) to one or more IRA accounts that then become part of your “SEPP 72-T Universe”.
Give us your facts, and we may be able to guide you.2010-08-06 15:34, By: dlzallestaxes, IP: [22.214.171.124]
L3: 403(b) and 72(t)You CAN set up a 72t plan from a 401k or 403b account, but it generally is NOT a good idea:
1) The plan administrators are unlikely to support your plan or even understand your needs.
2) Once you start you must finish the 72t plan using the same qualified retirement plan. You CANNOT do a direct rollover to an IRA and then continue from there because an IRA is considered a different TYPE of retirement plan from qualified plans.
3) If you take out too much in error, it is extremely unlikely that the plan will allow you to roll the excess back to avoid a busted plan.
4) There are alot of changes being made within 403b plans right now as they scramble to meet the new 403b Regs. This means you could be blindsided by changes in the plans or administration thereof.
In summary, youCOULD have a legal 72t plan from a 403b, but I would avoid it if at all possible. Do the IRA direct rollover and then start your plan from the IRA if the age 55 separation rule won’t work for you in avoiding a 72t plan in the first place.
2010-08-06 19:54, By: Alan S., IP: [126.96.36.199]