Forms of Payment from Fidelity
You may choose to receive your account through Fidelity in one of several ways.
You may elect to receive a lump-sum distribution from Fidelity for the full value of your accounts at the time of the payment.
Installment Withdrawal Program
As an alternative to a lump-sum distribution, you may elect to maintain your account balances through Fidelity and receive periodic withdrawals from your account until you have exhausted your account balances. You may designate the amount and the frequency of these withdrawals (subject to certain minimums required by tax laws).
You may also elect to roll over all or a portion of the account balances with Fidelity into an individual retirement account (IRA) or another plan you participate in that accepts rollovers, provided you meet certain tax law requirements. If you wish, you may use the proceeds of your account to purchase an annuity through TIAA-CREF or Income Solutions (an annuity purchase program available to Boston University Retirement Plan participants). You may wish to consult with your financial advisor before selecting this option.
In-Plan Roth Conversion
You may elect to convert all or a portion of your BU Retirement Plan Account (other than your Roth Contribution Account) to a Roth Contribution Account as an In-Plan Roth Conversion. This conversion actually occurs within the Retirement Plan. You do not receive a payment from the plan. The full amount of any conversions to a Roth 403(b) processed in a calendar year will be considered taxable income in that calendar year.
A key benefit of a Roth account is the potential for federally tax-free earnings and withdrawals. Converting to a Roth 403(b) can be beneficial if you expect your tax rate to increase in the future, because you pay taxes on the money you convert now. You are advised to consult a tax advisor to better understand these requirements.
You may take a distribution from your Roth 403(b) funds only if you are eligible, otherwise your funds are subject to the distribution rules of the Retirement Plan. An eligible distribution is (i) a distribution to an active Member on or after attaining age 65; (ii) a distribution made upon termination of employment, becoming disabled, or retirement; (iii) a distribution upon the Member’s death; or (iv) any distribution that would otherwise qualify as an eligible rollover distribution.