What Should I do with my 403b after I Retire?
Jason Stolz CLTC, CRPC
Your 403b is often one of the largest assets you accumulate during your career in education, healthcare, public service, or nonprofit work. When retirement arrives, one of the first major decisions you face is: What should I do with my 403b after I retire? The path you choose can influence your taxes, income stability, investment risk, and long-term financial security.
Retirees generally have four primary options: leave the money in the 403b, roll it into an IRA, convert part to a Roth, or roll the funds into a safe annuity for guaranteed income. Each choice carries long-term consequences and should be evaluated carefully based on your goals, risk tolerance, health, income needs, and legacy preferences.
At Diversified Insurance Brokers, we help retirees nationwide evaluate their 403b rollover choices, compare guaranteed income strategies, and coordinate retirement income planning across pensions, Social Security, Roth accounts, and personal savings. This guide breaks down your options so you can protect your money and build a stable, predictable retirement plan.
Retiring With a 403b?
Compare rollover options, guaranteed income strategies, and today’s strongest annuity rates.
Understanding How a 403b Works at Retirement
A 403b is a tax-advantaged retirement plan designed for schools, universities, churches, hospitals, and nonprofit organizations. During your working years, savings grow tax-deferred. Once you retire, your account becomes fully accessible—whether for income, rollovers, or future planning.
For a full explanation of how these plans operate, you can review:
How Does a 403b Work?
At retirement, you have four main choices:
• Leave the funds in the 403b plan
• Roll the 403b into an IRA
• Convert part or all to a Roth IRA
• Roll the funds into a safe annuity for guaranteed income
Your ideal strategy depends on how much safety, control, liquidity, and guaranteed income you want throughout retirement.
Option 1: Leaving Your 403b in the Employer Plan
You may be allowed to keep your 403b in the employer’s plan after retirement. This can be helpful if the plan has strong investment choices or low fees. But there are limitations, including:
• Limited investment menus
• No guaranteed lifetime income
• Required minimum distributions (RMDs) still apply
• Employer restrictions on withdrawals or full distributions
Most retirees prefer more control and flexibility, which leads them to roll money out of the plan.
Option 2: Rolling Your 403b Into an IRA
One of the most common decisions is a tax-free rollover into an IRA. This provides:
• More investment choices
• Greater control over risk and allocation
• Lower costs than many employer plans
• Easier account consolidation
However, an IRA alone does not guarantee income. To create lifetime income, an annuity is needed.
Option 3: Converting Your 403b to a Roth IRA
A Roth conversion allows you to move pre-tax 403b savings into a Roth IRA. This strategy can reduce future taxes and eliminate RMDs. It may make sense if:
• You expect higher taxes later
• You want tax-free retirement income
• You want to reduce Medicare or Social Security tax exposure
Many retirees convert gradually to avoid a large one-year tax burden.
Option 4: Rolling Your 403b Into an Annuity for Guaranteed Income
For many retirees asking what to do with their 403b after retirement, one of the strongest options is rolling the funds into a fixed annuity or fixed indexed annuity. These products protect your money from market losses, grow your account safely, and provide guaranteed lifetime income.
See the rollover process here:
How to Transfer a 403b to an Annuity
A 403b-to-annuity rollover may offer:
Principal protection from market declines
Guaranteed lifetime income through income riders
Better spousal protection without reducing your payout
Full control over beneficiaries—unlike many pension-style options
Liquidity features for emergencies or long-term care needs
Many retirees use an annuity to cover essential living expenses, reducing pressure on investment accounts and protecting withdrawals during market downturns.
Lifetime Income Calculator
Want to see how much guaranteed income your 403b could generate in retirement? Use the calculator below:
Coordinating Your 403b With the Rest of Your Retirement Plan
Your 403b decisions affect the rest of your retirement income strategy—including Social Security, IRA withdrawals, Roth conversions, pensions, and taxable investments. Many retirees use guaranteed income from annuities as the “foundation” of their plan, keeping Roth and taxable accounts invested longer for growth.
This approach reduces risk and protects your long-term financial stability.
How Diversified Insurance Brokers Helps With 403b Decisions
As an independent nationwide agency, Diversified Insurance Brokers helps retirees evaluate their 403b options and identify safe rollover strategies. We compare guarantees, payout rates, liquidity features, and long-term income potential—ensuring your retirement money lasts.
Request a 403b Retirement Review
Compare rollover options, income strategies, and safe ways to protect your 403b after retirement.
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FAQs: What Should I Do With My 403b After I Retire?
What are my main options for my 403b after I retire?
Common options include leaving the money in the 403b, rolling it to an IRA, transferring it to an annuity for guaranteed income, taking systematic withdrawals, or taking a lump-sum distribution. The best choice depends on your age, tax situation, and need for guaranteed income.
Can I leave my money in the 403b plan after retirement?
Yes. Many plans allow you to leave your balance in the 403b after you retire. This can be convenient, but investment choices, fees, and withdrawal flexibility may be more limited compared to an IRA or annuity.
Why would I roll my 403b to an IRA?
Rolling your 403b to an IRA can provide a wider range of investment options, more flexible withdrawal strategies, and easier coordination with your other retirement accounts. You can review the basics here: How Does a 403b Work?
When does it make sense to move my 403b to an annuity?
Transferring your 403b to an annuity can make sense if you want guaranteed lifetime income, principal protection, and predictable payouts that complement Social Security and any pension. Many retirees use an annuity to turn part of their 403b into a personal pension.
Is rolling my 403b to an annuity taxable?
No, not if it is done as a direct transfer or rollover to a qualified annuity. The money stays tax-deferred, and you only pay taxes on distributions later. You can see the mechanics in more detail at How to Transfer a 403b to an Annuity.
How do required minimum distributions (RMDs) affect my 403b?
Once you reach the age when RMDs apply, you must withdraw at least the IRS-required amount each year from tax-deferred accounts, including 403b plans. Your strategy after retirement should factor in RMD timing and how it impacts taxes and income.
Can I take a lump sum from my 403b when I retire?
Yes, most plans allow a lump-sum distribution. However, taking all the money at once can create a large taxable event and potentially push you into a higher tax bracket. Many retirees prefer rollovers or structured payouts instead of cashing out everything.
How can an annuity help protect my 403b from market volatility?
By moving a portion of your 403b into a fixed or fixed indexed annuity, you can protect that balance from market losses while creating a guaranteed income stream. This helps stabilize your retirement plan and reduces the risk of selling investments in down markets.
Should I use my 403b for guaranteed income or growth?
Many retirees do both: they allocate part of the 403b to guaranteed income using an annuity and keep a portion invested for long-term growth. The right mix depends on your essential expenses, risk tolerance, and other income sources.
How can I get help deciding what to do with my 403b after I retire?
Working with an independent advisor can help you compare keeping your 403b in place, rolling it to an IRA, or transferring it to an annuity. A personalized analysis can show how each option affects your taxes, income, and long-term security.
About the Author:
Jason Stolz, CLTC, CRPC, is a senior insurance and retirement professional with more than two decades of real-world experience helping individuals, families, and business owners protect their income, assets, and long-term financial stability. As a long-time partner of the nationally licensed independent agency Diversified Insurance Brokers, Jason provides trusted guidance across multiple specialties—including fixed and indexed annuities, long-term care planning, personal and business disability insurance, life insurance solutions, and short-term health coverage. Diversified Insurance Brokers maintains active contracts with over 100 highly rated insurance carriers, ensuring clients have access to a broad and competitive marketplace.
His practical, education-first approach has earned recognition in publications such as VoyageATL, highlighting his commitment to financial clarity and client-focused planning. Drawing on deep product knowledge and years of hands-on field experience, Jason helps clients evaluate carriers, compare strategies, and build retirement and protection plans that are both secure and cost-efficient.
