How to Convert 457 Retirement Fund to a Roth IRA
A Roth rollover can be good retirement savings strategy.
Thinkstock/Comstock/Getty Images
A Section 457 plan is an employer-sponsored retirement plan much like a 401(k). It is offered to employees by non-profit organizations, is made up of pretax contributions, and requires yearly distributions at age 70 1/2. The Roth IRA is composed of after-tax money with no withdrawal requirement. Consequently, when you convert a 457 plan to a Roth, you must pay taxes on the rollover amount.
Ask your 457 plan administrator if the conversion is allowed. Each non-profit tailors its 457 plan differently. Roth conversions might not be among the approved account actions. If you can make the conversion, proceed to the next step.
Step 2Ask the plan administrator to make a direct, or trustee-to-trustee, transfer of your plan assets to your Roth IRA. Give the administrator the Roth trustee's name and address, as well as your Roth account number.
Step 3Look for your IRS Form 1099-R by mail in January or February. In Box 1 of the form, find your distribution amount. The taxable amount of the distribution appears in Box 2a.
Step 4Report the distribution when you file your IRS Form 1040. The amount in Box 1 should appear on Line 16a of Form 1040, while the figure in Box 21 should be entered in Box 16b.
References
Writer Bio
D. Laverne O'Neal, an Ivy League graduate, published her first article in 1997. A former theater, dance and music critic for such publications as the "Oakland Tribune" and Gannett Newspapers, she started her Web-writing career during the dot-com heyday. O'Neal also translates and edits French and Spanish. Her strongest interests are the performing arts, design, food, health, personal finance and personal growth.