Poll

Can I rollover a 403b to VTSAX?

Yes
1 (100%)
No
0 (0%)

Total Members Voted: 1

Author Topic: 403b Rollover to VTSAX  (Read 1256 times)

kilogulf

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403b Rollover to VTSAX
« on: August 12, 2016, 02:43:02 PM »
I have a 403b from a previous employer that is just sitting there.  The balance is approx $37k.  After reading JL Collins The Simple Path to Wealth, I want to put it all in Vanguard's VTSAX.  I'm 52 and willing to accept a higher risk scenario.  I've got a 401k going with my current employer, but there is only 4 years worth of contributions so it's pretty weak.  I would like to avoid rolling the 403b into a Vanguard Roth.  Would rather just slap it into stocks and let it ride for 10-15 years.

Is this the dumbest thing you've ever heard of or am I pursuing the right thing...

Thanks!

kilo

Spork

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Re: 403b Rollover to VTSAX
« Reply #1 on: August 12, 2016, 02:51:45 PM »
I have only dealt with 401ks... but this page on Vanguard implies to me it is just another normal rollover:  https://personal.vanguard.com/us/insights/article/403b7-account-rollover-092015

Call them.  The average every day call center employee at Vanguard really actually knows what he/she is talking about.  They'll hold your hand and walk you through it.  If you have a contact at the institution that holds the 403b, they'll do a 3-way call and just make it happen right in front of you.  Easy.

Mother Fussbudget

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Re: 403b Rollover to VTSAX
« Reply #2 on: August 12, 2016, 03:56:25 PM »
The roadmap to do this is straight-forward: 
1. Setup a new rollover Traditional IRA account at a brokerage firm (Vanguard/Fidelity/etc). 
2. Setup a rollover from your existing 403B into this new IRA.
3. Purchase whatever investments YOU PICK in that account, and watch the savings grow.

The rollover can usually be done as a direct ACH funds transfer from account-to-account.  But this usually involves your 403Bb administrator selling all your funds, issuing you a check for the balance in the account on the date of rollover.   Be sure to deposit that check in your new account within 30 days of issue, otherwise you risk causing a 'taxable event', where you could be forced to pay taxes and/or penalties on the full amount of the check.  30 days.  Period.

If you're interested in VTSAX, there's an incentive to do it at Vanguard, but realize Fidelity has FSTVX almost a direct equivalent to VTSAX, so Fidelity is a viable alternative.   
Incentive:  pay NO COMMISSIONS on trades on Vanguard mutual funds (ETF's) when held in a Vanguard brokerage account
(same for Fidelity funds/ETF's in a Fidelity brokerage account).

Do more research on a "403b to IRA Rollover".  Hope this helps

seattlecyclone

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Re: 403b Rollover to VTSAX
« Reply #3 on: August 12, 2016, 08:17:05 PM »
I would like to avoid rolling the 403b into a Vanguard Roth.  Would rather just slap it into stocks and let it ride for 10-15 years.

I think you may be confused about what a Roth IRA actually is. It seems as though you might think that Roth and stocks are mutually exclusive. They are not. A Roth IRA is just an account where you can put investments and have certain tax benefits. You can own stocks in there, or mutual funds, or bonds, or even leave it in cash if you want.

You have a few decisions to make.
1) What company do you want to hold your investments with? Vanguard? Fidelity? Schwab? Wealthfront? Someplace else?
2) What type of account do you want to use? To have no immediate tax consequences you'll want to roll your traditional 403(b) money into a traditional IRA and Roth 403(b) funds into a Roth IRA. If you move your traditional 403(b) funds into a Roth IRA, you'll owe taxes on the converted sum this year. Probably not what you want.
3) What investments do you want to own? You seem to have settled on VTSAX. Given that, Vanguard is probably the best option for (1) because they won't charge you any transaction fees for buying and selling shares of VTSAX.

kilogulf

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Re: 403b Rollover to VTSAX
« Reply #4 on: August 13, 2016, 09:05:23 AM »
Thanks seattlecyclone, Spork, and Mother Fussbudget!  I think my 'confusion' with a Roth was I didn't equate it to an account where i could pick my own ETF's or assign my own risk level.  And I am certainly jaded by the super-safe-they-pick-it-for-you 401k malarkey that your employer sets up automatically.  I just want to get this $37k into something that's growing...NOW.

THANKS AGAIN everyone!  Now I'm off to search MMM forum for things like "Wealthfront vs Betterment" and "Paying off credit cards when you have no extra money"....you know...the impossible tasks that have no immediate gratification whatsoever. :-)

kg in Dallas