How to Roll a 403(b) Into an IRA
The complete direct-rollover walkthrough: open the IRA, move the money by direct rollover, and choose between a traditional and Roth destination.
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Why educators roll a 403(b) into an IRA
Rolling an old 403(b) into an Individual Retirement Account (IRA) is the most popular destination for a reason: an IRA usually offers a far wider menu of low-cost investments than a district 403(b), and it lets you pull several old accounts into one place you actually monitor.
A 403(b) is tied to your employer and limited to the vendors your district approved, historically a list dominated by high-fee annuity products. An IRA is yours alone. You pick the custodian, you pick the investments, and you can hold the whole thing for pennies on the dollar in broad index funds.
The trade-off: an IRA does not offer the 403(b) loan feature, and it changes the rules around penalty-free early withdrawals (especially if you are rolling 457(b) money). For many educators with an old, expensive 403(b) and no need to borrow against it, an IRA is worth a close look. Here is exactly how to do it.
The direct rollover, step by step
Open the receiving IRA first
Choose a low-cost custodian and open a traditional IRA for pre-tax 403(b) money, or a Roth IRA for Roth 403(b) money. Have the new account number ready before you contact the old provider.
Request a direct (trustee-to-trustee) rollover
Tell your old 403(b) provider you want a direct rollover to your new IRA. The funds move provider-to-provider. You never take possession. A direct rollover is not subject to the 20% mandatory withholding or the 60-day deadline that apply when a check is made out to you.
Match pre-tax to traditional, Roth to Roth
Keep the tax character the same so the rollover is not taxed. Pre-tax balance to a traditional IRA; Roth balance to a Roth IRA. Converting pre-tax money to a Roth IRA is allowed, but the converted amount is taxable income in the year of the conversion, so do it on purpose, not by accident.
Confirm the money arrives and gets invested
A direct rollover often lands as cash in the IRA. It is not working for you until you actually invest it. Choose your funds once the transfer settles, and check that the full amount came over.
Keep the paperwork for tax season
The distribution is reported on Form 1099-R, and you report the rollover on your return. A direct rollover to a like account is generally not taxed, but the form still shows up at tax time. Hold the confirmation in case of questions.
Unsure how to request a direct rollover?
Talk it through with a licensed specialist before you move the money.
Request my rollover review →403(b) rollover to IRA rules
The rules are simpler than most people expect. These are the ones that come up most for school employees:
- You need a reason the plan will release the money. An old account from a former district can usually be rolled any time. A current district account is often locked until you leave or reach 59½, depending on the plan.
- Direct is the clean way. A direct rollover into a like IRA (pre-tax to traditional, Roth to Roth) is generally not taxed. If the plan pays you instead, 20% federal tax is withheld, and you have 60 days to deposit the full amount. To roll over all of it, you must replace the withheld 20% from other money.
- Like to like. Pre-tax 403(b) money goes to a traditional IRA. Roth 403(b) money goes to a Roth IRA. Pre-tax to Roth is a conversion and is taxed.
- The once-per-12-months IRA rule does not apply here. That limit covers IRA-to-IRA rollovers. Rollovers from a 403(b) plan to an IRA are not counted.
- Not everything can be rolled. Required minimum distributions and hardship distributions are not eligible rollover distributions.
- Keep the paperwork. The distribution appears on Form 1099-R and the rollover goes on your tax return.
If you have a 403(b) annuity contract, check for a surrender schedule first (see the checklist below).
Source: IRS Topic No. 413, Rollovers from retirement plans. This is general education; your own tax result depends on your facts.
403(b) rollover to a Roth IRA
There are two different moves, and the tax result is different for each:
- Roth 403(b) to Roth IRA. A direct rollover of Roth 403(b) money to a Roth IRA is generally not taxed.
- Pre-tax 403(b) to Roth IRA. This is a Roth conversion. The pre-tax amount you convert is included in your taxable income for the year, so a large balance can push you into a higher bracket.
You can convert part of a balance instead of all of it. Whether a conversion makes sense depends on your tax rate now compared with your expected rate later, and on having cash from other sources to pay the tax. See our guides on converting a 403(b) to a Roth IRA and what a conversion costs.
Traditional IRA vs Roth IRA for a 403(b) rollover
Your 403(b)'s tax type usually points to the matching destination. Neither account is better for everyone, so here is how they differ.
Traditional IRA
The home for pre-tax 403(b) dollars. A direct rollover is not taxed, the money keeps growing tax-deferred, and withdrawals are generally taxed as ordinary income. Required minimum distributions generally begin at age 73 (75 if you were born in 1960 or later).
Roth IRA
The home for Roth 403(b) dollars. Qualified withdrawals are tax-free, and Roth IRAs have no required minimum distributions for the original owner during their lifetime. Rolling pre-tax money here is a taxable conversion: it can fit some situations and be costly in others.
Unsure which way the tax math points for you? A Life Gateway review can walk through the rollover both ways: pre-tax kept as traditional, or a deliberate Roth conversion. That lets you compare the tax impact before you commit. For the full walkthrough on converting pre-tax dollars to Roth, read our 403(b) to Roth IRA conversion guide.
Before you roll: a few things to weigh
An IRA rollover suits many educators, but check these first.
- Loans: you cannot borrow from an IRA. If you rely on a 403(b) loan feature, a rollover to your new employer's plan may suit you better than an IRA.
- 457(b) early-access: governmental 457(b) money generally has no 10% early-withdrawal tax, but after a rollover to an IRA, early IRA withdrawals may be subject to it unless an exception applies. Keep this in mind if you may retire before 59½.
- Surrender charges: if your old 403(b) is an annuity, ask the insurer for the surrender schedule and any market value adjustment before moving. Sometimes waiting out the period first is worth it.
- Employer stock or special features: rare in 403(b) plans, but if your account has unusual holdings, get advice before moving them.
Ready to see the full picture? Start with the 403(b) Rollover Guide for the rules overview, or run the retirement calculator to see how the rolled-over balance fits your pension and Social Security.
Frequently Asked Questions
How do I roll a 403(b) into an IRA without paying taxes?
Open the receiving IRA first, then ask your old 403(b) provider for a direct trustee-to-trustee rollover to that IRA. Match pre-tax money to a traditional IRA and Roth money to a Roth IRA. Because you never take possession of the funds, the 20% mandatory withholding and 60-day deadline that apply to checks made out to you do not apply, and a direct rollover to a like account is generally not taxed. You still receive a Form 1099-R and report the rollover on your return.
Should I roll my 403(b) into a traditional or Roth IRA?
A direct rollover of pre-tax 403(b) dollars to a traditional IRA is generally not taxed; Roth 403(b) dollars roll into a Roth IRA. You can convert pre-tax money to a Roth IRA, but the converted amount is taxable income in the year you do it. Whether a conversion makes sense depends on your current and expected future tax rate, so it is worth modeling before you decide.
How long does a 403(b)-to-IRA rollover take?
A direct rollover typically takes one to three weeks once both accounts are open and the request is submitted. The money often arrives as cash in the IRA, so remember to actually invest it. It is not working for you until you choose funds.
Can I roll my 403(b) into an IRA while still working?
Your current employer's active 403(b) generally cannot be rolled out until you leave or reach age 59½ (when many plans allow an in-service rollover). A 403(b) from a former employer can be rolled into an IRA at any time.
What is the downside of rolling a 403(b) into an IRA?
You lose the ability to take a plan loan, and if you roll governmental 457(b) money into an IRA, early IRA withdrawals may be subject to the 10% additional tax unless an exception applies. A governmental 457(b) generally does not have that tax. For educators with an old, high-fee 403(b) and no need to borrow, those downsides may be outweighed by lower fees and a wider investment menu. Check any surrender charges first.
What are the rules for a 403(b) rollover to an IRA?
A direct rollover from a 403(b) to an IRA is generally not taxed. If the plan pays the money to you instead, 20% federal tax is withheld and you have 60 days to deposit the full amount, which means replacing the withheld 20% from other money. Pre-tax money goes to a traditional IRA and Roth money to a Roth IRA. The one-rollover-per-12-months rule for IRAs does not apply to rollovers from a 403(b) plan to an IRA. Required minimum distributions and hardship distributions cannot be rolled over.
Can I roll a 403(b) into a Roth IRA?
Yes. Roth 403(b) money can be rolled directly into a Roth IRA, which is generally not taxed. Pre-tax 403(b) money can also go to a Roth IRA, but that is a conversion: the converted amount is taxable income in the year of the conversion. You can convert only part of a balance, and it helps to have cash from other sources to pay the tax.
What is the difference between a traditional IRA and a Roth IRA for a 403(b) rollover?
A traditional IRA receives pre-tax 403(b) money without current tax, and withdrawals are generally taxed as ordinary income. A Roth IRA receives Roth 403(b) money, and qualified withdrawals are tax-free. Moving pre-tax money to a Roth IRA is taxed as a conversion. Traditional IRAs have required minimum distributions starting at age 73 (75 if born in 1960 or later), while Roth IRAs have none for the original owner.
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Reviewed by the Life Gateway advisory team. Last reviewed October 2026. This guide is educational and not individualized financial, tax, or legal advice. Rollover rules change and your situation is unique, confirm specifics with your plan administrator, a tax professional, or a licensed advisor. Verify any advisor at FINRA BrokerCheck.