How do I Transfer 457 Funds to an IRA?

You can move your governmental 457 money to a traditional or Roth IRA.

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A 457 plan is a retirement plan for government and nonprofit employees that is much like a 401(k). Until 2001, the Internal Revenue Service did not allow you to transfer assets from your governmental 457 plan to anything other than another governmental 457. The Economic Growth & Tax Relief Reconciliation Act of 2001 provided greater freedom relative to transferring one type of retirement account to another, including to an individual retirement arrangement. You cannot, however, transfer a nongovernmental 457 to any other type of retirement plan.

Step 1

Contact your 457 plan administrator. To effect the transfer, the administrator may ask you to fill out a form. You must let him know how much you want to transfer and which IRA you want to move the funds to.

Step 2

Contact your IRA trustee. Some trustees have their own paperwork to complete before receiving the transfer. You need to let the institution know how much you are transferring and from which institution and account.

Step 3

Ask the 457 plan administrator to make a direct, or trustee-to-trustee, transfer of the specified funds to your Roth IRA or traditional IRA. A direct transfer ensures you sidestep any potential tax liability.

Step 4

Check in with both the plan administrator and the IRA trustee to be sure the transaction has been completed. If after 10 business days it has not been done, contact both parties for an explanation.