You can roll a 403(b) into a traditional IRA, a Roth IRA, a 401(k), another 403(b), a governmental 457(b), a SEP-IRA, or a SIMPLE IRA, provided the receiving account accepts incoming rollovers. Each destination changes how the money is taxed from that point forward, what early withdrawal rules follow it, and how well it’s protected from creditors. So the answer to what you can roll your 403(b) into is really seven answers, and picking the wrong one can turn a tax-free transfer into a taxable event with a 10% penalty attached.
Traditional IRA
This is the most common destination because it preserves the same tax-deferred structure your 403(b) already uses. The money keeps growing without a tax hit until you withdraw it in retirement. Nearly every brokerage and bank offers traditional IRAs, so you’re unlikely to run into a receiving institution that refuses the transfer, and there’s no dollar limit on how much you can roll in.1IRS. Rollover Chart
The trade-off compared with staying in an employer plan shows up in creditor protection, discussed further below, and in fees, which can go either direction.
Roth IRA
Rolling pre-tax 403(b) money into a Roth IRA is allowed, but the IRS treats it as a conversion. The entire amount you move counts as taxable income for that year.1IRS. Rollover Chart On a large balance that can be a serious tax bill in a single year. The payoff is that qualified Roth IRA withdrawals in retirement come out completely tax-free, including all the investment earnings.
Whether that math works for you depends on your tax bracket now versus what you expect it to be in retirement, and whether you can pay the conversion tax from money outside the retirement account. Paying the tax with rollover dollars defeats much of the point.
Another Employer Plan: 401(k), 403(b), or Governmental 457(b)
You can roll into another employer-sponsored plan, but only if that plan’s rules specifically allow incoming rollovers.2Office of the Law Revision Counsel. 26 USC 401 – Qualified Pension, Profit-Sharing, and Stock Bonus Plans Not every plan does, so check with the new plan administrator before starting anything.
One boundary worth knowing: if you’ve moved to a government job and want to use a 457(b), it has to be a governmental 457(b). Non-governmental 457(b) plans maintained by private tax-exempt employers cannot accept rollovers from a 403(b).
The 457(b) Early Withdrawal Quirk
A governmental 457(b) normally has no 10% early withdrawal penalty. You can take money out at any age after leaving that employer without the extra tax hit. But the IRS tracks where money came from. Assets that originated in your 403(b) and were rolled into a 457(b) keep the 403(b)’s early withdrawal penalty rules attached to them.3Internal Revenue Service. Retirement Topics – Exceptions to Tax on Early Distributions If you’re under 59½ and withdraw that rolled-over money, the 10% penalty still applies to the portion that came from your 403(b). Money you contributed directly to the 457(b) is unaffected.
SEP-IRA
A SEP-IRA works like a traditional IRA for rollover purposes. Pre-tax dollars from your 403(b) go in without triggering tax, and the account continues under traditional IRA distribution rules.1IRS. Rollover Chart SEP-IRAs are usually tied to self-employment income, so this destination tends to make sense if you’ve left a 403(b) job to work for yourself.
SIMPLE IRA
You can roll 403(b) money into a SIMPLE IRA, but only after the SIMPLE IRA has been open for at least two years.1IRS. Rollover Chart Roll it in too early and the IRS treats the incoming amount as a taxable distribution. Confirm the two-year clock with the SIMPLE IRA custodian before initiating anything.
Special Rules for Roth 403(b) Money
If part of your 403(b) is a designated Roth account, meaning you made after-tax Roth contributions, that money can only go to certain destinations. You can roll Roth 403(b) money into a Roth IRA or into another employer plan’s designated Roth account through a direct rollover. You cannot roll it into a traditional IRA or a pre-tax employer plan account.
The five-year aging period is the part most people don’t anticipate. Qualified tax-free distributions from a Roth account require the money to have been in a Roth account for at least five tax years. When you roll a Roth 403(b) into a Roth IRA, the clock from the 403(b) does not carry over. Your five-year period for the Roth IRA is measured from the first year you contributed to any Roth IRA.4Internal Revenue Service. Retirement Plans FAQs on Designated Roth Accounts If you’ve never had a Roth IRA before, the clock starts fresh on the rollover date. Someone with eight years of Roth 403(b) aging could lose credit for those years by rolling into a brand-new Roth IRA. If you already have an established Roth IRA, the earlier start date controls, and you keep the aging benefit.
Rolling Roth 403(b) money into another employer’s designated Roth account has a similar reset. The five-year period under the distributing plan does not carry over to the recipient plan.4Internal Revenue Service. Retirement Plans FAQs on Designated Roth Accounts If the new employer’s plan is new to you, counting starts from scratch.
When You’re Allowed to Roll Over
You can’t roll over your 403(b) whenever you like. Federal law limits distributions, and therefore rollovers, to specific triggering events. Separating from service with the employer that sponsors the plan is the most common one, whether by quitting, layoff, or retirement.
You can also take a distribution and roll it over after reaching age 59½ even if you’re still working for the same employer, provided the plan allows in-service distributions. Other qualifying events include total and permanent disability, the death of the account holder (for beneficiaries), and termination of the plan itself.5Internal Revenue Service. IRC 403(b) Tax-Sheltered Annuity Plans Some plans are more restrictive than the tax code requires, so read your plan’s summary plan description to see which triggering events it recognizes.
Direct Rollover vs. Indirect Rollover
Whichever destination you pick, the mechanics of getting the money there matter almost as much as the destination itself.
A direct rollover sends the money straight from your 403(b) provider to the receiving institution. The check is made payable to the new custodian for your benefit, not to you personally. No taxes are withheld, and the IRS treats it as a nontaxable transfer.6Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
An indirect rollover puts a check in your hands. The moment that happens, your 403(b) provider is required by law to withhold 20% for federal income taxes.7eCFR. 26 CFR 31.3405(c)-1 – Withholding on Eligible Rollover Distributions You then have 60 days to deposit the full original balance, not just the amount you received, into the new retirement account.6Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions That means covering the withheld 20% out of your own pocket. If you don’t, the shortfall becomes a taxable distribution, and if you’re under 59½ the 10% early withdrawal penalty applies to it.
A concrete example: your 403(b) balance is $50,000. With an indirect rollover, you receive a check for $40,000 after withholding. To complete a tax-free rollover, you must deposit $50,000 into the new account within 60 days, meaning the $40,000 you received plus $10,000 from your own funds. You’ll get the withheld $10,000 back as a tax refund when you file, but you need the cash up front. Deposit only $40,000 and the missing $10,000 becomes taxable income that year.
There is almost no reason to choose an indirect rollover. Direct rollovers are simpler, safer, and avoid the withholding trap entirely. The one-per-year IRA rollover limit does not apply to rollovers from employer plans to IRAs, so that restriction is not a concern here.6Internal Revenue Service. Rollovers of Retirement Plan and IRA Distributions
What Can’t Be Rolled Over
Two situations produce money that looks rollable but isn’t.
Required minimum distributions. Once you reach age 73, the IRS requires you to start taking minimum distributions from your 403(b) each year. Those RMDs cannot be rolled over. They must come out and be included in taxable income. If you’re rolling over your 403(b) in a year you’ve already reached RMD age, take that year’s required distribution first, then roll the rest. Roll too much and you create an excess contribution in the receiving account. Miss the RMD and you owe a 25% excise tax on the shortfall, dropping to 10% if corrected within two years.8Internal Revenue Service. Retirement Plan and IRA Required Minimum Distributions FAQs
Deemed loan distributions. If you have an outstanding loan against your 403(b) when you leave your employer, the unpaid balance doesn’t just vanish. What happens depends on your plan’s rules. When a plan reduces your account balance by the unpaid loan amount, called a plan loan offset, that offset is treated as a distribution but can be rolled over. If the offset happened because you left your job or the plan terminated, you have until your tax-filing deadline including extensions for that year to complete the rollover, not the usual 60 days.9Internal Revenue Service. Plan Loan Offsets
By contrast, if the plan treats the unpaid loan as a deemed distribution, meaning it stays on the books as a taxable event without reducing your account balance, you cannot roll that amount over.10Internal Revenue Service. Retirement Plans FAQs Regarding Loans You’ll owe income tax on it and possibly the 10% early withdrawal penalty. If you have a loan out, contact your plan administrator before initiating anything.
Creditor Protection Changes When You Move
Where your money sits affects how well it’s shielded from creditors, and this rarely comes up in rollover conversations. Most 403(b) plans are governed by ERISA, which includes an anti-alienation provision that protects retirement assets from creditors in and out of bankruptcy, with no dollar limit.
Traditional and Roth IRAs offer weaker protection. In federal bankruptcy, IRA assets you contributed directly are protected only up to $1,711,975 (the cap in effect through 2028). Amounts you rolled over from an employer plan into an IRA generally retain unlimited bankruptcy protection and don’t count toward that cap. Outside of bankruptcy, IRA creditor protection depends entirely on state law, and some states offer much less than ERISA does.
If you’re in a profession with elevated liability risk or you’re facing potential legal claims, rolling a 403(b) into an IRA could weaken your asset protection. It’s worth raising with an attorney before pulling the trigger.
Fees Are the Last Thing to Check
Rolling over a 403(b) is often a chance to lower the fees eating into your returns, but not always. Many older 403(b) plans, especially those built around annuity contracts, carry higher expense ratios than a self-directed IRA or a modern 401(k). Annuity-based 403(b) options can also include surrender charges that penalize you for moving money out within a certain number of years, sometimes as high as 10% of the withdrawn amount in the early years of the contract.
Some employer 403(b) plans go the other way and offer institutional share classes with fees lower than what you’d pay in a retail IRA. Before initiating a rollover, compare the all-in cost of your current investments (the expense ratio plus any administrative fees) against what you’d pay in the destination account. A 1% difference in annual fees on a $100,000 balance compounds to tens of thousands of dollars over a 20-year retirement horizon. If your current plan has competitive fees and investment options you’re satisfied with, leaving the money where it is may be the better call. You’re not required to roll over just because you left the job.