I have searched but can't find any documentation that puts our retirement plan totally at ease. I know if you open a Roth IRA you have to wait 5 years before making withdraws. I'm specifically talking about rolling my wife's 401/403 Trans America retirement account into say a Vanguard traditional IRA in about 4 years if/when she retires with me and she will be 60 at that time. I already signed my irrevocable retirement papers for the end of February 2028. I cant stay got to go, I can go sooner but not later. Because Trans America will not let you select what fund you withdraw from when she retires Their rep suggested/ stated that most Baptist heath employees roll their plans into a traditional IRA. Looked into it, sounds good, and they have more funds in a Vanguard or other IRA than Trans America. What I'm trying to confirm is after age 59.5 if you retire roll your 401/403 into a new traditional IRA with say Vanguard, once the monies clear, that you can start making withdraws right away and not have to wait 5 years like a Roth. Everything I read we should be good to go. Any info or supporting documentation would be appreciated. Thanks Hray.

When you move funds from 401k or 403b into traditional IRA, ensure that the transfer is properly coded on the IRS forms. There is a particular alphanumeric code that conveys to the IRS that your funds are NOT withdrawn and subject to taxation, but are simply moving to another retirement vehicle.

Thanks it would probably be a custodian to custodian transfer Think that’s the proper terminology. But will keep that in mind. Thanks

Whenever I’ve had a question about such things, I called Vanguard and they were able to answer it.

I’ve rolled 401ks from my company into a brokerage 401k. All I did each time was contact the receiving brokerage which, in my case, is Schwab. I think important info is how the check is made out. Then you contact the 401k management company to tell them what you want. Some of them can transfer directly, some of them won’t and will send you a check. You have to get it deposited and processed before the time limit hits when you have to pay taxes on it.

Talk to a CPA this is complicated. The penalties for getting it wrong are draconian. 50 percent.

I agree talk with a cpa. I am pretty sure you will be able to withdraw as long as you are of age 59-1/2. Or should I say, your wife.

When I retired in Dec 2021, I rolled my employer 401k into a regular Schwab IRA. Super easy, no taxes, and I started withdrawals right away. Definitely do custodian to custodian.

Withdrawals from a 401k or IRA are both identical as far as federal income tax. Both are fully taxed as income.

Seriously look at maximizing Roth conversions now. Your tax bracket may not be lower in retirement, meaning a conversion now may not cost more in taxes. At the least, consider starting a Roth now so you get that 5 year clock started.

Roth withdrawals are invisible to the tax man. Many other taxes or fees are based on taxable income, so being zero income is a really valuable thing.

Yes, 59.5 is good to make withdrawals without penalty from traditional 401k or IRA. The IRS documentation is specific on this. But it is written in a confusing way. Print it out and even use a pencil to group the paragraphs and sub-paragraphs.

Thank you all.

quote:

Originally posted by Fly-Sig:
When I retired in Dec 2021, I rolled my employer 401k into a regular Schwab IRA. Super easy, no taxes, and I started withdrawals right away. Definitely do custodian to custodian.

Do the straight Custodian to Custodian, don't touch the funds yourself.

Schwab has always handled any of my rollovers promptly and correctly.

I enrolled 401k’s into IRA’s 3 times when leaving an employer, all well before I was 59.5

Like others said above, custodian to custodian.

quote:

Originally posted by 220-9er:
Whenever I’ve had a question about such things, I called Vanguard and they were able to answer it.

Spoke with a Vanguard Rep. and said I would be good to go for my scenario.