Annuity Rollover Options for Teachers
Jason Stolz CLTC, CRPC
Annuity Rollover Options for Teachers — Educators often accumulate retirement savings through 403(b), 457(b), or pension plans. When changing jobs or retiring, you may face decisions on how to roll over these funds without taxes or penalties. At Diversified Insurance Brokers, we help teachers and public-sector employees evaluate safe rollover options into fixed or indexed annuities that preserve principal, guarantee income, and simplify retirement planning.
Get a Free Rollover Review
Compare your 403(b) or 457(b) rollover options to today’s top-rated fixed and income annuities.
Request an Annuity ReviewUnderstanding Teacher Retirement Rollovers
Many educators accumulate retirement savings in employer-sponsored 403(b) or 457(b) accounts. Upon retirement or job transition, these balances can be rolled over to an individual IRA or annuity without taxes—if done correctly. A direct rollover transfers funds directly from your plan custodian to an insurance carrier or IRA, avoiding tax withholding. Choosing the right annuity type can convert this lump sum into guaranteed lifetime income, helping replace your paycheck in retirement.
Popular Rollover Paths for Teachers
1. Fixed Annuities: Guarantee a specific rate of return for a chosen term (often 3–10 years). These are ideal for teachers seeking principal protection and predictable growth.
2. Fixed Indexed Annuities: Offer growth potential linked to a market index (like the S&P 500) but never lose value due to market downturns. Perfect for teachers who want upside potential without risk.
3. Income Annuities: Convert part or all of your 403(b) into a pension-like monthly income that lasts as long as you live. Our lifetime income page explains these options in detail.
Benefits of Rolling to an Annuity
- Principal Protection: Funds are shielded from market losses.
- Guaranteed Income: You can lock in income for life or a set period.
- Tax-Deferred Growth: Interest compounds tax-free until withdrawn.
- Beneficiary Control: Choose who inherits your annuity value directly, avoiding probate.
- Customization: Add income riders, long-term care features, or inflation protection.
Important Considerations
Before transferring, confirm your plan’s surrender or vesting rules, and compare annuity contract features. A teacher nearing retirement may prefer immediate income; a younger educator may prioritize accumulation. Avoid indirect rollovers (where funds are sent to you personally) to prevent tax withholding and the 60-day redeposit rule. Always coordinate with your benefits office and a fiduciary advisor.
Estimate Your Lifetime Income
Use the calculator below to see how your 403(b) or 457(b) could generate guaranteed monthly income.
Example: Rolling a 403(b) to a Fixed Indexed Annuity
Let’s say Maria, a 58-year-old teacher, has $220,000 in a 403(b). She’s retiring next year and wants income starting at 65. We roll the funds directly into a 7-year fixed indexed annuity with a 10% income bonus. Over seven years, the value grows tax-deferred, and the income rider guarantees $3,100/month for life starting at 65—no market risk, no guesswork.
Annuity Rollover Resources:
For more guidance, see our resources on current annuity rates, annuities 101, common annuity myths, and lifetime income.
Why Work with Diversified Insurance Brokers
- 40+ years serving educators and public employees nationwide
- Access to 75+ top-rated carriers with educator-friendly options
- Specialized rollover coordination for 403(b), 457(b), and pension plans
- Personalized retirement income illustrations and transparent comparisons
Talk With an Annuity Specialist Today
We’ll review your 403(b) or 457(b) and show which rollover option gives you the safest lifetime income.
Licensed in all 50 states • Fiduciary, family-owned since 1980
FAQs: Annuity Rollover Options for Teachers
Can teachers roll over a 403(b) into an annuity?
Yes. 403(b) balances can roll into a fixed or indexed annuity without taxes if transferred directly to the insurer.
Is there a penalty for rolling over my 403(b)?
No, as long as the transfer is a direct rollover between institutions, there’s no tax or early withdrawal penalty.
What’s the difference between a 403(b) and a 457(b)?
Both are tax-deferred retirement plans for educators and public workers. 457(b) plans often have fewer withdrawal penalties before 59½.
Do annuities guarantee income for life?
Yes—if you select an income rider or immediate annuity, you can receive lifetime payments that supplement your pension and Social Security.
How do I avoid taxes on my rollover?
Use a direct rollover, not an indirect one. The funds should go straight from your plan custodian to the annuity carrier.
Are annuities safe?
Yes. Fixed and indexed annuities protect principal from market losses. They’re backed by the issuing insurer’s claims-paying ability.
Can I roll over into more than one annuity?
Yes. You can split your 403(b)/457(b) balance among multiple contracts to diversify rate terms or income start dates.
When should teachers start planning rollovers?
Start 6–12 months before retirement or a job change to coordinate plan paperwork and rate locks.
Can I still contribute to my 403(b) after rolling over part of it?
Usually yes—if you remain employed, you can continue contributing to your current plan while rolling over prior balances.
How do I get a personalized rollover quote?
Complete our short Annuity Review Form, and our licensed advisors will compare rates and income options for you.
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Choose how you’d like to connect—call or message us, then book a time that works for you.
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Licensed in all 50 states • Fiduciary, family-owned since 1980
