If you no longer work with the employer who created your 403(b) account, you can transfer your 403(b) balance to a traditional IRA. If you have a traditional 401(k) or 403(b), you can transfer your money to a Roth IRA. However, this would be considered a conversion to Roth, so you would have to declare the money as income when you pay your tax return and pay ordinary income tax on income. A reinvestment occurs when assets from an employer-sponsored retirement plan, such as a 401(k) or 403(b), are transferred to an Individual Retirement Account (IRA).
Within 60 days of receiving the distribution check, you must deposit the money into a cumulative IRA to avoid current income taxes. A traditional (or cumulative) IRA is generally used for pre-tax assets, because the savings will remain invested with deferred taxes and you won't owe any taxes for the actual reinvestment transaction. Gold and other ingots are collectibles under IRA statutes, and the law discourages the possession of collectibles in IRAs. Many people use cumulative IRAs to consolidate former employers' plans and access a wider range of investment options. Yes, you can add money to your IRA with annual contributions, or you can consolidate other IRA assets or retirement plans previously sponsored by the employer. The only difference is that money from an accumulated IRA can later be transferred to an employer-sponsored retirement plan if the plan allows it.
The only divorce-related exception for IRAs is if you transfer your IRA participation to a spouse or former spouse and the transfer is made under an instrument of divorce or separation (see section 408(d)(2) of the Internal Revenue Code). Do not use Form 8606, Non-Deductible IRAs (PDFPDF, Non-Deductible IRAs) to declare non-deductible Roth IRA contributions. IRA investments in other unconventional assets, such as public limited companies and real estate, risk disqualifying the IRA because of prohibited transaction rules that prohibit self-negotiation. You can transfer any money from an IRA that you saved outside of your employer-sponsored plan to a Vanguard IRA through an asset transfer. You can transfer your IRA to a qualified retirement plan (for example, a 401(k)), assuming that the retirement plan has text that allows you to accept this type of reinvestment.
Generally, the IRA custodian or trustee only requires a signed contribution form to deposit the funds into an IRA. However, you must use Form 8606 to declare the amounts you converted from a traditional IRA, a SEP, or a simple IRA to a Roth IRA. In general, a qualified charitable distribution is a distribution that is otherwise taxable from an IRA (other than an ongoing SEP or SIMPLE IRA) owned by a person 70 and a half years old or older, that is paid directly from the IRA to a qualifying charity.
