Author Topic: Brokerage account within a 403B(TIAA)???what???  (Read 338 times)

NYC_Squirrel

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Brokerage account within a 403B(TIAA)???what???
« on: December 16, 2022, 03:38:48 PM »
Hello, not sure if anyone here has a similar situation.

I recently just noticed that my 403b provider (TIAA) has an option for self-directed brokerage account. It looks like I can transfer money from the 403B account into this self-directed brokerage account and where I can select my own funds (vs. the funds that only the employer offers).

If anyone came across this type of structure before...wouldnt such a transfer between the accounts be consider a taxable event? Also, the 403b offers Roth...what would happen (in tax consequences) if I only transfer the ROTH portion?

thanks in advance!

seattlecyclone

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Re: Brokerage account within a 403B(TIAA)???what???
« Reply #1 on: December 16, 2022, 07:07:42 PM »
These aren't uncommon in the 401(k)/403(b) space. It's all within the retirement account umbrella, no tax consequences for moving your money back and forth through the brokerage window. If the money started out as Roth it will stay that way in the other account. My last employer only allowed the brokerage option for pre-tax funds, though I know of no reason a different employer couldn't set it up to include the Roth funds as well.

reeshau

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Re: Brokerage account within a 403B(TIAA)???what???
« Reply #2 on: December 17, 2022, 09:49:03 AM »
Yeah, not uncommon nowadays.  Fidelity calls this option "BrokerageLink."

One way you will know it's not a separate account: you will still be charged your plan's management fees, even though you self-direct.  These are usually rolled into the fund fees within the plan.  For BrokerageLink, the irony is that these can't come from the BrokerageLink investments themselves, so they show up as a separate cash charge from within the plan.  It does make these fees fully visible, though.

NYC_Squirrel

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Re: Brokerage account within a 403B(TIAA)???what???
« Reply #3 on: December 18, 2022, 11:34:28 AM »
thank you, yeah i notice the management's fee and transaction fee...not sure I like being charged $35 for every time I buy their funds even though it has funds that my employer doesn't.