It’s important to understand your options for moving and managing your money, to maximize your retirement savings within your account(s).
Moving money from one account to another is referred to as a transfer, rollover, exchange, or conversion. These terms are often used interchangeably, but they are three separate actions. It can be helpful to identify the differences and purpose each serve.
There are many reasons to consider moving money, and multiple options for actions to take to reach your financial goals. Moving money: your options breaks it down for us.
Transfers occur when funds are moved between the same account types, (403(b) to 403(b) or Roth IRA to Roth IRA) at the same (or different) investment company. Transfers are not taxable or required to be reported to the IRS, however you will receive a tax form 5498 as confirmation of the transaction.
Example 1: Jennifer worked for Washington School District in 2021, where she opened a 403(b) with Company A. In 2023, Jennifer leaves Washington School District and starts working at Park School District where she opens a 403(b) with Company B. Jennifer has the option of transferring her Washington 403(b) with Company A to her new Park 403(b) with Company B.
Example 2: Tom worked for Oak School District in 2020, where he opened a 403b with Company A. In 2023, Tom leaves Oak School District and starts working at Maple School District where he opens a 403b, also with Company A. Since both Oak School District’s 403(b) and Maple School District’s 403(b) use the same company, Tom has the option of transferring the funds from his 403(b) with Oak School District into his 403(b) with Maple School District.
Direct rollovers generally occur when money moves from one account type to another account type, such as 403b to 401k or 403b to Traditional IRA or 457b to 403b. This can be done within the same investment company or between two different investment companies. These types of rollovers are reported to the IRS, but not taxable, as long as the funds move from pre-tax to pre-tax or a Roth to a Roth account.
With indirect rollovers, the money from one account is distributed to the participant or account owner and then redeposited into another qualified plan within a 60-day window to avoid income tax and penalties. These types of rollovers are not taxable unless the money is moved from a pre-tax account to a Roth account. These types of rollovers are generally not recommended. Call us for more information.
Example 1: Jennifer decided to roll the money from her 403(b) with Washington School District into an IRA account she had with WEA Member Benefits, instead of moving the money to her 403(b) with her new employer.
Example 2: Jennifer is looking to retire from the Washington School District, but she wants to get her finances in order. She has two 401ks from jobs she had in the past and wants to put them in her Washington School District 403(b) account. Jennifer would move these 401k accounts over to her 403(b) by doing a Direct Rollover.
Exchanges occur when you decide to change investment companies, but you remain with the same employer (403(b) to 403(b)). An exchange is a non-taxable event and is also non reportable.
Example 1: Jennifer is unhappy with Company A, a 403(b) provider with the Washington School District, that manages her 403(b). One option Jennifer has is to choose another provider that offers a 403(b) option with the Washington School District 403b. Since the district offers three other choices Jennifer can do an exchange and move her 403(b) from Company A to one of the other options.
Conversions occur when moving funds from a traditional IRA to a Roth IRA. This action creates a taxable event.
Example 1: Jennifer has a traditional IRA, and after a financial consultation with a tax advisor, she decides to convert those funds into a Roth IRA and pay the taxes now versus later in retirement.
Not sure which option is right for you? Our team will work with you, no matter where you are in your financial journey, to find the best option that aligns with your goals. Call us at 1-800-279-4030, Extension 8568 or schedule a meeting online.
“I’m saving for retirement and have multiple retirement accounts, but moving money seems like a hassle. Why should I consider moving my money?”
Moving money can make sense for a number of reasons. Each reason is unique to the individual, their retirement savings, and their situation. When navigating that decision-making process, ask yourself the following questions:
- Have I changed jobs?
- Consider moving those hard-earned funds into your new employer’s retirement saving plan and/or an IRA to keep your financial future on track. Start by considering the cost involved in your former employer’s plan to help guide you in your decision-making.
- If your retirement account at your former employer is under a certain dollar amount, you may be required to move your money out of that account. Check the IRS website for specific rules and regulations.
- Am I looking to simplify?
- Managing your investment accounts can become easier when you simplify (exchanges, transfers, rollovers, etc.). It streamlines your investment strategy, beneficiary designations, and required minimum distributions.
- Am I paying too much?
- Multiple accounts mean multiple costs, and not all costs are the same. Compare the cost(s) of your retirement savings account(s) to identify potential savings that could leave you with more money in retirement.
Answers to these questions can be used as a guide in your decision-making process, when evaluating the right action(s) for you to take on your financial journey.
If this section generated more questions than answers, or if you’re looking for peace of mind that comes with talking to an expert, we are here for you. Schedule an appointment at your convenience. Call us at 1-800-279-4030, Extension 8568 or schedule a meeting online.
Moving money to Member Benefits is a great idea, but don’t take our word for it! These are just five of the reasons our participants have chosen to move and keep their money with Member Benefits.
WEA Member Benefits is here for you to and through retirement. You CAN stay with us in retirement.
Low fees, low cost
IRA program participants pay one low annual administrative cost of 0.45%, with an annual fee cap of $750.*
403(b) program participants administrative cost follows a tiered structure that decreases as your account balance grows (see table below).
|403(b) Balance||Administrative Fee Rate||Administrative Cost in Dollars|
|$0 to $150,000||0.28%||$2.80 per thousand|
|$150,001 to $300,000||0.25%||$420 on the first $150k plus $2.50 per additional thousand|
|$300,001 to $450,000||0.20%||$795 on the first $300k plus $2.00 per additional thousand|
|$450,001 to $600,000||0.10%||$1,095 on the first $450k plus $1.00 per additional thousand|
|$600,001 to $750,000||0.05%||$1,245 on the first $600k plus $0.50 per additional thousand|
|above $750,000||0.01%||$1,320 on the first $750k plus $0.10 per additional thousand|
No-load (commission-free) mutual funds, no transfer fees, no surrender penalties or withdrawal charges in our 403(b) and IRA accounts.
Investment choices – chosen and regularly monitored by a professional investment committee.
- 20+ high quality investment options to find the mix that works for you.
- No-load funds line-up includes index, actively managed, ESG, and Target Retirement Funds.
- Access to the Guaranteed Stable Investment Fund —a fixed-income investment option for your portfolio, traditionally offering a stable rate of return.**
Combining accounts – we accept rollovers from a variety of retirement plans, including IRAs, 401(k), 457(b), Simple IRA, and SEP IRA.
Member focused – we operate as a trust, reinvesting any profits back into programs that benefit our participants. Our staff is not paid commission, but rather serves as advocates for you, your family, and will help you understand what’s best for your financial journey.
Family eligibility – your spouse/domestic partner, children (and their spouses), parents, and in-laws may be eligible to open a low-cost IRA with Member Benefits.***
*WEAC members enjoy a $600 fee cap within the IRA program.
**WI residents only. Interest is compounded daily to produce a yield net of Empower’s administrative fee of 0.60%. Empower Annuity Insurance Company (EAIC) is compensated in connection with this product by deducting an amount for investment expenses and risk from the investment experience of certain assets held in EAIC’s general account. All earnings on investments are credited gross of 403(b) and IRA program fees. The Guaranteed Stable Investment Fund is a group annuity insurance product issued by EAIC. Amounts contributed to the contract are deposited in EAIC’s general account. Payment obligations and the fulfillment of any guarantees specified in the group annuity contract are insurance claims supported by the full faith and credit of EAIC. EAIC periodically resets the interest rate credited on contract balances, subject to a minimum rate specified in the group annuity contract and subject to change. Past interest rates are not indicative of future rates. Participant Level Protections (PLPs) are in place to help preserve the guarantee of the fund. PLPs may limit your ability to withdraw funds from the fund. For more information on the PLPs and how it may affect your account, please call Retirement and Investment Services at 1-800-279-4030, Extension 8568.
*** Family members, including your spouse or domestic partner, children and their spouses, parents, and parents-in-law, may also be eligible to participate in many of our programs. Restrictions may apply. Certain state residency required.
Whatever option you choose to move your money, start here! We accept funds from 401(k), 403(b), 457, and other retirement accounts.
Follow the steps below to move to transfer money to Member Benefits from another retirement savings account vendor or provider:
You can get support from one of our Retirement and Investment Services (RIS) Specialists at any time. Our specialists will work with you one-on-one to help determine what move and/or action is in your best interest.
Obtain a statement from your existing retirement account provider. Your account statement needs to indicate what type of retirement account you have (examples: 403(b), 401(k), Traditional IRA, Roth IRA, 457(b), 401(a), or a different type of qualified plan).
Verify you can transfer a retirement account into your existing or new retirement account with Member Benefits. Start by calling or signing up for a consultation with one of our Retirement and Investment Specialists to discuss your specific situation. You can also review the IRS rollover chart for more information.
In this call, the specialist will help you…
- Understand your employer’s unique plan rules
- Help you determine what type of rollover you are eligible for
- Provide you with the required forms
- Review next steps
- Discuss things to consider:
- Does the provider require their own forms for transferring funds to a different company?
- Does the provider require a notary or signature guarantee?
- Will the provider charge you a fee for moving the account to us?
- Are there any surrender fees that will be charged for moving your account?
- Does the account need to be liquidated or moved to cash before the rollover request is submitted to them?
Call us at 1-800-279-4030, Extension 8568 or schedule a meeting online.