If you work for a school or a nonprofit organization, your retirement program probably is a 403(b). You can contribute up to $17,000 per year to this retirement savings plan, and your employer also can contribute some money. All the funds will be invested, typically through a brokerage house, but investment successes and fees vary. However, if you're not happy with your results, you might be able to switch vendors.
Switch Within the Plan
You can transfer your 403(b) from one brokerage to another if both are on the approved list of your plan and the vendors agree. You'll have to fill out a transfer form and get approval from your plan and both vendors. Some institutions charge transfer fees, so you'll have to look carefully at any charges or penalties for switching. The new account must provide at least equal benefits.
You can transfer 403(b) accounts from one brokerage to another if you change employers and move your account from one plan to another. The new plan and brokerage must be comparable to the existing account, and both distributing and receiving vendors have to agree to the transfer. You'll have to complete an application for the new account.
Making Other Transfers
You can move your 403(b) from a brokerage into a 401(k) plan or an individual retirement account at a different firm if you leave the employer with the 403(b). Generally, this is a simple process, but the 403(b) plan and the brokerage vendor must provide for it and must approve the transfer.
Make Transfers Direct
Any transfers from one plan to another should be direct -- from one account or brokerage to another -- rather than going through you. A transfer completed by paying you the money so you can move it to another account usually will be subject to a 20 percent Internal Revenue Service withholding tax. You can avoid this with a direct transfer, or rollover. You'll have to follow the rules of your 403(b) plan for any transfer.
- Internal Revenue Service: Retirement Plans FAQs regarding 403(b) Tax-Sheltered Annuity Plans
- 403b Wise: New 403(b) Transfer Rules
- 403b Compare: Frequently Asked Questions
- TIAA CREF: Contract Exchanges/Plan-to-Plan Transfers
- TD Ameritrade: 403 (b) Account Transfer Form
- American Century Investments: 403(b): A Retirement Plan for Employees of Schools
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