Consolidating 403b accounts

Based in Greenville SC, Eric Bank has been writing business-related articles since 1985. By Paul Menchaca NEW YORK (Main Street) --For professionals in their 30s, a decade-plus spent in the workforce not only means that they've held a number of different jobs at different companies but also that they've held multiple 401(k)s spread across their former employers.If you take longer, the IRS will treat the distribution as taxable income -- unless it is a tax-free distribution from a Roth IRA.You might also be hit with an early withdrawal penalty tax of 10 percent.Brokerage accounts normally give you access to many mutual fund families, so that you don’t have to set up accounts with each mutual fund company.If you combine your IRAs into a self-directed account, you’ll have the most investment choices, including real estate and certain precious metals.Rather than figuring out a way to consolidate those accounts, the couple instead decided to cash them out."They said that they didn't think it was a lot of money," Lewis says.

If you instead perform a trustee-to-trustee transfer from your employee plan, you avoid the withholding tax. "I said, ' That's ,000, buddy.'" Steven B.Goldstein, vice president and private CFO at o XYgen, says the chance to have immediate money on hand can unfortunately be too tempting for some people in their 30s to pass up.Another method of combining IRAs is through a rollover, in which you withdraw money or property from one IRA and deposit it in another.A rollover is tax-free if you finish it within 60 days of taking a distribution.

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