Expert: Gina Boykin - 2/20/2008

Question
Hello

I recently rolled over a 403B to a Traditional IRA.  I have two questions.  1. How will the taxation on this work? 2. I made a $400.00 contribution in the 403B before the rollover.  Can I still contribute the full $4,000 to the IRA for the year or will the 403B contributions effect it?

Answer
There is no tax effect of a rollover to an IRA.  If you do another rollover, though, into a Roth IRA, there would be tax implications.

If you ever plan to rollover this money from your IRA into another employer-sponsored plan (another 403b or a 401k) in the future, you should contribute money into a separate account.  You will not be able to do this transfer in the future if you do a regular contribution to this account after it has been rolled over.

I have not been able to find any information that suggests that your contribution would be reduced after the rollover; however, I suggest calling the company where your IRA is invested to verify.