by Larry George
(Berryville, AR USA)
I have contibuted to a 457(f) deferred compensation plan for each of the past three years. Each year's contribution has gone into a separate account, with each account having a different payout date.
Can the 457(f) funds be rolled over into my traditional IRA rollover account? If so, must I wait for the payout date to arrange the rollover, or can the funds be rolled over before the payout date? Thanks.
Wendy: You can roll the 457 funds into an IRA after you terminate employment or retire. You can't do it until you leave employment (as you are likely still contributing).
I also have a 457, because I was a govt. employee too. The BENEFIT of a 457, for me, is that I can access funds when I need them -- before age 59 l/2.
I retired at 55, so between 55 and 59 l/2, I can withdraw funds and pay taxes -- but without a penalty.
IF I had moved those funds into an IRA, and then needed some extra money, I would have had to pay taxes AND penalty (which would be a huge loss to me). I would have lost at least 40% between the two...
So nothing is easy... and it depends on your employment status AND your age.
Hope this helps!
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