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Messages - akchang

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Taxes / Nongovernmental 457b disbursement question
« on: March 06, 2021, 04:27:22 PM »
Hi.  I'm 52 years old, in the 32% tax bracket, and have been thinking more and more about retiring early.  In the meantime, I have two 457B plans that are non-governmental.  It's also possible I might be taking a new job.  This new place has a 457b plan but doesn't accept old ones (and neither did my second job accept the first job's 457b).  My first job's 457b has around $250k in it.  I've managed to keep it there for a while but it looks like I may have to have it distributed based on a change in employment status.  I might also have to do the same with my other 457b if I move to this new job, though this second 457b is much smaller. 

I have several options, including delaying to a specific date, electing a lump sum, or electing periodic installments.    For sake of argument, let's say I decide to do a lump sum and have the money to pay for the taxes.  After I've done that, can I take all the original 457b corpus and put it into my Roth account? If so, can I do this directly by rolling it over into the Roth account and paying taxes (or are there required intermediate steps?). Although it will be a big tax hit, I figure it will give that corpus more time to compound in the Roth account and tax rates are going way up in the future anyway.  But let me know if you don't think this would be a wise move or if there are alternative strategies I should be investigating.

Thanks.  I just recently found your site and look forward to learning a ton more.

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