The 411 on 457 Plan Rollovers

Did you know that you may have an option to rollover a 457 “deferred comp” plan if you have retired from or left a company that offered the plan?

A 457 plan is a deferred compensation plan that allows participants to make pre-tax contributions to their retirement savings. Those contributions grow tax-deferred until the money is withdrawn. Many clients like this because of the ability to make pre-tax contributions.

In the past, 457 plans had limited investment and rollover options, however, guidelines have since changed. Now, if you retire or leave your job, you can transfer your 457 to a traditional IRA or other qualified 401(k) plan, tax-free. This option to consolidate your retirement savings plans may be an advantage because it makes it easier to manage your money in one place. Better yet, you may be able to take advantage of other investment options that could potentially grow your money to help meet your retirement income requirements.

There are some exceptions. You are ineligible for the rollover if you are already receiving distributions as equal periodic payments for ten years, if you are receiving distributions as annuity payments over your lifetime, or if you’ve started receiving minimum distributions because you've reached the required age.

457 plan or deferred compensation plans can be complicated. We recommend that you consult with a tax consultant to understand your options so that you don’t incur any tax penalties or unnecessary fees.

As the financial advisor through CUSO Financial Services, L.P. (CFS) at 1st United Credit Union, Rahil Machiwalla can answer any questions you may have about 457 and retirement plans. He is available to chat by phone or can meet you at any 1st United branch. Schedule your appointment with Rahil today.

This information brought to you by:

Rahil Machiwalla, CFS Financial Adivsor
Rahil Machiwalla, CUSO Financial Services, L.P.*
Financial Advisor
(925) 598-4718
CA Insurance Number: 0G20361

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*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the Credit Union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS to make non-deposit investment products and services available to Credit Union members. Please consult a qualified tax advisor for specific tax advice. View CFS Referral Disclosure