How to Convert a 457 to an IRA Account
Moving your 457 plan into an IRA account is a relatively simple process. It is not possible to "convert" such a plan directly into an IRA, the way that one can convert an IRA into a Roth IRA, but it is possible to transfer the money from a 457 plan into a Roth IRA. The process is basically identical to moving money from a 401(k) or 403(b) plan into an IRA.
Other People Are Reading
Instructions
-
-
1
Open an IRA with the custodian of your choice. Make sure that your custodian is able to handle all of the types of assets that you intend to invest in or are invested in currently in your 457 plan. You must do this before you begin the rollover process, because you cannot do so without a destination account already in place.
-
2
Contact your 457 plan administrator and notify them that you wish to roll your plan over into an IRA. They will either send you the paperwork necessary to complete the rollover or direct you to a website where you can download the forms.
-
-
3
Complete the required forms. You will have to specify the custodian to which you are transferring your funds, as well as whether you want your funds transferred in cash or in kind. If you want them transferred in cash, your current holdings will be liquidated at market price on the day that your request is processed and the proceeds sent to the IRA custodian.
-
4
Wait for your request to be processed. It may take up to 2 weeks for your money to show up in your IRA. If your money has not been transferred within that timeframe, contact your plan administrator to see why not. More than likely there is some problem that is holding up the process.
-
5
Verify that all funds have been transferred out of your plan.
-
1
Tips & Warnings
Sometimes residual dividends or other investment income will sweep in to an account after it has been transferred. If this happens, notify your 457 plan administrator and request that they transfer the residual income and close the account.
