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I have a 457 plan with my former employer (about $7,000) that I would
like to rollover to my existing Vanguard Roth IRA. I am aware that
there will be income taxes to pay. But I would rather do that now and
also save in the fund cost department. I have talked to the company
holding the 457 plan and they gave me a withdrawal form. It looks
like they will be doing an electronic transfer to my checking
account. I was under the impression that a rollover would go directly
to Vanguard. Is there any disadvantages or having it go to me first
and then just invest as I would normally? Thanks!
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On Sep 15, 12:50 pm, j...@y...com wrote:
> I have a 457 plan with my former employer (about $7,000) that I would
> like to rollover to my existing Vanguard Roth IRA. I am aware that
> there will be income taxes to pay. But I would rather do that now and
> also save in the fund cost department. I have talked to the company
> holding the 457 plan and they gave me a withdrawal form. It looks
> like they will be doing an electronic transfer to my checking
> account. I was under the impression that a rollover would go directly
> to Vanguard. Is there any disadvantages or having it go to me first
> and then just invest as I would normally? Thanks!
Why not call Vanguard and ask?
Dave
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Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
Newsgroup.
j...@y...com wrote:
> I have a 457 plan with my former employer (about $7,000) that I would
> like to rollover to my existing Vanguard Roth IRA. I am aware that
> there will be income taxes to pay. But I would rather do that now and
> also save in the fund cost department. I have talked to the company
> holding the 457 plan and they gave me a withdrawal form. It looks
> like they will be doing an electronic transfer to my checking
> account. I was under the impression that a rollover would go directly
> to Vanguard. Is there any disadvantages or having it go to me first
> and then just invest as I would normally? Thanks!
Normally you want to avoid having distributions sent directly to you,
as they usually will withhold taxes and penalty. I believe that 457
plans don't have the 10% penalty for early withdrawal. However, the
taxes will still be a problem. Are they planning on withholding taxes?
If so, you'll have to make up the difference and then figure all that
out at tax time.
It would cleaner and less confusing for all concerned if it was an
f/b/o check from the plan, with no taxes withheld. Then you can just
pay the taxes due with your return.
Brian
--------------------------------------
Misc.invest.financial-plan is a moderated newsgroup where Moderators strive
to keep the conversations on-topic for financial planning. Other posting
guidelines include a request for brevity and another for trimming posts to
which we respond. For all of the other tips and suggestions, see "FROM THE
MODERATORS: Posting to misc.invest.financial-plan", a weekly post now on the
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