403b Withdrawal: Fill & Download for Free

It’s included in your income, and you pay whatever tax results from the additional income. (Plus penalty if you’re not 59–1/2, same as, e.g., a 401(k) plan.)

It is multi-pronged and takes into consideration Obamacare since I retired at age 61 and my wife retired a few years earlier. The mix will also change each year until 2021 or 2022.First that means we need to keep certain income below the maximum threshold for a 2-person family in terms of modified adjusted gross income (MAGI). If you plan ahead, you can legally game the system because there is no means-testing. In our first year (2017), we drew upon various resources including last paycheck (I retired on Dec 31) to get us through the next 3 months combined with my unused vacation payout that came after Jan 1; a small pension, Roth IRA, some consulting money, after-tax savings, and 401k/403b withdrawal that got us through the rest of the year.Year 2 was different being comprised of pension, Roth IRA and 401K and wife moved from Obamacare to Medicare.We are now in Year 3 and the base includes pension, Roth IRA and 401K as in previous years, but now added wife’s full retirement age (FRA) social security (SS) and some proceeds from a real estate sale.In 2020 it will be pension, Roth IRA, 401K and wife’s social security and I turn 65 late in the year, so I move to Medicare, but the Obamacare MAGI requirement persist to the end of the calendar year.In 2021, the Obamacare limits are gone. To the 2020 mix we will add an annuity from part of our 403b accounts. I may or may not choose to take SS at 65, rather than wait until 2020.In 2022, I will definitely take SS if I did not the previous year. Those sources of income will more than cover our expenses and represents an amount bigger than my last paycheck and not far off from our combined take-home when we were both working. We will still have a 401k/403b balance that we can draw from and will be set.

It's possible that:your new plan is actually a pre-tax 403B only - (no Roth);your old plan won't rollover amounts of under $1000 (terming it "de minimis"); oryou checked the wrong box on the rollover form.Any of those things might explain why you received a check from your former employer's plan.Both Roth 401K and Roth 403B plans allow you to contribute after-tax earnings to grow tax-free. "Regular" 401K and 403B (for non-profits, universities, etc.) are made up entirely of pre-tax contributions.If your new employer's plan with Fidelity does have a Roth feature, you can roll over your old Roth401K within 60 days into the new plan, directly (either endorse the check straight to Fidelity, or deposit it and write a new check to Fidelity for the same amount within the time period allowed.) without incurring any charges or fees.Did you also get a statement indicating what portion was your after-tax contribution and what part was interest earned on the Roth 401K? Your contributions are your own - you already paid tax on them. You would probably pay a 10% penalty, in addition to your regular taxes, on the earnings portion only of the Roth 401K for an early withdrawal.However, you may be able to avoid even that. From the Fidelity website:Withdrawals made after age 59 and 1/2 are normal retirement withdrawals and are not taxed. You paid tax on that income when you first contributed to the Roth IRA.If the withdrawal is made before age 59 and 1/2 and is only up to the amount that has been contributed to the Roth IRA then no income tax is charged. Withdrawals of contributions are tax-free.If the withdrawal was made before age 59 and 1/2 and includes amounts above what you contributed (your investment earnings) then you may have to pay tax. There are certain situations where the IRS will allow you to withdraw without penalty. Funds can be withdrawn for higher education expenses or to buy a home. Certain hardship circumstances such as permanent disability also allow funds to be withdrawn tax and penalty free.In other words, you might be able to withdraw without penalty as you plan on paying education expenses - but I'm not sure if that applies to student loans, as opposed to specific tuition payments. You should consult the good people at Fidelity, to get guidance specific to your situation. Roth IRA Taxes - Rules for Contributions & Withdrawals