When an employee leaves an organization, it is common practice for their retirement account to be transferred out of the retirement plan. The account is usually rolled to another retirement plan or to an IRA.
It’s important to know that when 403(b)(9) accounts are rolled to a 401(k) or IRA, eligibility for the housing allowance provision is lost.
How Envoy Protects the 403(b)(9) Money Source When Ministers Change Employers
When a minister changes employers to a non-ministerial entity, Envoy can easily transfer the 403(b)(9) account to a specially earmarked IRA that protects the money source. If the minister later joins another organization where he/she is eligible for housing allowance, the IRA account can be rolled into the new plan, retaining full housing allowance eligibility.
To learn more about housing allowance, visit our Housing Allowance FAQs or download our FREE Housing Allowance eBook.
* Envoy Financial does not offer legal or tax advice and encourages that you consult with a lawyer and/or professional tax advisor for personalized tax advice.