Transferring from 72t IRA to 403b for in service loan…
L1: Transferring from 72t IRA to 403b for in service loan…I have an IRA I am currently taking a 72t distribution from and don’t turn 59 1/2 until next year. The entire amount of the IRA was used in the initial calculation to maximize current income. I also have a separate 403b from a current employer that was not part of the initial 72t distribution calculation. Can I transfer an amount of money from my current IRA to my current 403b then qualifying me to take an in serviceloan from my 403b to pay for some emergency expenses?2012-09-10 17:14, By: laub, IP: [22.214.171.124]
L2: Transferring from 72t IRA to 403b for in service loan…The proposed transfer would bust your 72t plan and you would owe retroactive penalty and interest for all the penalty free distributions you have taken.
You need to determine your plan modification date, which is the later of 5 years from your first distribution or reaching 59.5. After that date your plan is over and you can transfer IRA funds into the 403b.
Does your 403b offer hardship distributions? Or perhaps your balance is too low to meet your emergency need?2012-09-10 17:24, By: Alan S, IP: [126.96.36.199]
L3: Transferring from 72t IRA to 403b for in service loan…I need to move the money from the IRA to the 403b to have enough for either a loan or a hardship. Will I bust the 72t even though I will not receive a 1099 from the 403b because I am taking a loan on the money not a taxable distribution??2012-09-10 17:38, By: laub, IP: [188.8.131.52]
L4: Transferring from 72t IRA to 403b for in service loan…Like Alan said, your proposal to transfer the SEPP Plan IRA into your other 403(b) plan will bust the SEPP Plan because your are making a transfer from one plan type (IRA) to a different plan type (403(b)).
SEPP Plan nothwithstanding, will your 403(b) plan accept a transfer from the IRA? What is the source of the IRA funds? If the IRA is “contributory” or a mix of “contributory” fundsand “403(b)” funds (known as “comingled funds”), I have some reservation as to the legality of your making the transfer you propose.
Jim F2012-09-10 18:12, By: Jim F, IP: [184.108.40.206]
L5: Transferring from 72t IRA to 403b for in service loan…What is the nature and amount of your “emergency expenses”. They may qualify for exceptions under a different provision of the tax code.
You might be better off just busting the plan, and paying the 10% penalty on what you already took, and need now.
You could set up another SEPP 72-T afterwards, but I would not recommend it since you will be 59 1/2 next year anyway, and can then take whatever distributions you need.2012-09-10 18:35, By: dlzallestaxes, IP: [220.127.116.11]