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I'll admit up front that I know very little about money matters, i.e. retirement funds, taxes, etc.
That said, I have a 403b with MetLife through my employer. My employer recently stopped ("suspended" according to them, but they stopped) contributing to the 403b due to the economy and the supposed financial hardships brought about as a result. They've been cutting our hours as well, and I know it's only a matter of time before benefits are the next to go. I inquired about shutting the 403b down, withdrawing the money, and depositing it in a Roth IRA, but was told I couldn't do that. I guess you can only get the money if you take out a loan that has to be repaid with interest, if you have some kind of hardship, or if your employment at the company ends.
My point is that I DO have a hardship......AND IT'S MY EMPLOYER!! I started the 403b with the understanding that they would be contributing to it, and then they went back on that, so that's money lost for me. Then, they cut our hours.....more money lost. And now after all that they tell me I can't remove my money from this account and put it in an individual retirement fund that my employer doesn't have a hand in? My God, the way things are going in this country there won't even BE a 403b program at this place in a year or so, so what does it matter? It's MY MONEY!!
If I were you, I'd leave it in the 403(b), as long as there are no serious reasons not to (like no investment choices). You'd have to pay taxes and probably a penalty to move it to a Roth. At some point you should be able to roll it into a traditional IRA (like when you leave your company).
You can still contribute $5000/year for you and $5000/year for your spouse (whether your spouse has income or not) to Roth IRAs (as long as you meet the income limits).
Realize that money isn't for today; it is for you future retirement. If your employer is cutting your hours, then maybe you need to get another job.
If I were you, I'd leave it in the 403(b), as long as there are no serious reasons not to (like no investment choices). You'd have to pay taxes and probably a penalty to move it to a Roth. At some point you should be able to roll it into a traditional IRA (like when you leave your company).
You can still contribute $5000/year for you and $5000/year for your spouse (whether your spouse has income or not) to Roth IRAs (as long as you meet the income limits).
Realize that money isn't for today; it is for you future retirement. If your employer is cutting your hours, then maybe you need to get another job.
I'd love to get another job, Charles, but I recently bought a home, and I live in a remote area 3 hours away from a major city, so jobs are basically unavailable here aside from my current employer. I obviously can't sell the house and move because I just bought it. My point is that since my employer isn't holding up their end of things, I should be able to take whatever money I have and put it elsewhere should I choose to.
You can do whatever you want but there may be taxes and penalties to consider.
No, I CAN'T do whatever I want, Charles, that's the premise of this thread. I was willing to pay taxes or penalties to make a withdrawl, but they won't let me take the $$ for reasons other than those I listed. I just got off the phone with them again. I had read somewhere that if your company reduces your income, which mine has, that this could qualify as one of the "hardships", but they wouldn't freekin' budge.
Again, I understand them having to be cautious of people abusing this money, but what about those of us who are responsible and just want to make a change with money that already belongs to us?
why not just leave it with them for now and start your own roth or ira insted going forward?.....
if you are still working for the company because they changed the amount or suspended future contributions that has nothing to do with what you already got.... they gave you the money up to this point... they can change the terms of the plan about new money coming in but it dosnt effect the old money... if you got something in the past from your employer as a contribution consider it a bonus as alot of us have 401k plans that dont even have matching.
No, I CAN'T do whatever I want, Charles, that's the premise of this thread. I was willing to pay taxes or penalties to make a withdrawl, but they won't let me take the $$ for reasons other than those I listed.
What reasons? The 403b is in your name, you can do whatever you want with it, including taking a distribution, roll-over, etc.
You can certainly roll your 403B into a your ROTH, do a google search. As Charles points out, there may be tax implications. I don't think there would be a penalty as it is a roll-over.
As for your employer not giving you the benefits you think you rightly deserve...yeah is sucks but get over it. We got it-you can stop b*tching and moaning now.
heres the hitch.,..yes you can elect to move the money into your own ira roll over but it may not be feasible..
unlike 401k's which offer many investment choices including mutual funds many 403b's are invested in annuity products...those products can carry severe surrender fees .....
you really need to look into where the money is and are their surrender fees. its been a real problem with all the cutbacks and changes.
It's always been my understanding that as long as you work at that employer, your money has to stay in that 403B. Leave, and you can take it with you (via a transfer into a suitable retirement investment of your choice).
It's not very fair that your employer has stopped the 403b, but then -- that means that amount of your paycheck is now coming to you, right? Open your own IRA with those proceeds....
Here's another point:
I don't know how long ago you became eligible for the 403b, but you may not be fully vested. Employer contributions rarely - if ever nowadays - are fully yours unless you meet the vesting rules.
Most current plans have you vested after 7 years, but you really need to read your plan document. It may not be an easy read, but you should understand what you're entitled to and when. If all else fails, find a friendly planner and let him/her explain it to you; or call the plan administrator...
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