Can You Roll Over Your 403(b) While You’re Still Working?

Yes! You may be able to move your 403(b) savings to another provider while you’re still working. This is called a 403(b) contract exchange, and many California educators don’t realize this option may be available to them.

A contract exchange allows you to move eligible retirement savings from one 403(b) provider to another without leaving your job or triggering a taxable distribution, provided the exchange meets IRS requirements and your school district’s plan rules.

This can give you an opportunity to secure higher interest-crediting rates while continuing to make contributions through payroll deductions.

Is Your 403(b) Keeping Up With Today’s Options?

Think about how much cell phones have changed over the years. What was once the latest technology can quickly become outdated.

403(b) retirement products have evolved, too. New options may offer more competitive interest-crediting terms, enhanced benefits, and different opportunities for protecting and growing your retirement savings.

Is your current 403(b) still a flip phone, or have you upgraded to something better?

Many California educators choose to make a 403(b) contract exchange to take advantage of more current rates, features, and retirement opportunities that may not have been available when they originally opened their accounts.

The key is comparing your current rates, benefits, and contract terms with what’s available today.

What If You Want to Move Your 403(b) Into an IRA?

If you’re age 59½ or older, your plan may also allow an in-service distribution, making it possible to roll eligible 403(b) funds into an IRA while you’re still employed.

A direct rollover of eligible pretax funds into a traditional IRA generally does not create an immediate taxable event.

Unlike a contract exchange, this moves your savings out of your employer’s 403(b) plan and into an IRA, where different retirement strategies may be available.

Explore Your Retirement Options

At Welles Consulting, we have over 20 years of experience helping individuals navigate important retirement decisions, with a particular focus on California educators.

Whether you’re approaching retirement or still several years away, we can help you review your existing 403(b), understand your options, and explore strategies designed to protect your retirement savings while providing opportunities for growth.

Schedule Your Complimentary Review

Not sure where you stand?

Sources: Treasury Regulation 1.403(b)-10(b), Contract exchanges and plan-to-plan transfers (govinfo.gov). Internal Revenue Service: Publication 571, Tax-Sheltered Annuity Plans (403(b) Plans), on contract exchanges and rollovers to a traditional IRA; Retirement Plans FAQs regarding 403(b) Tax-Sheltered Annuity Plans, on the conditions for an exchange and when a plan may allow money out at 59½; Publication 575, Pension and Annuity Income, on deferring tax by a rollover; Notice 2026-13, Safe Harbor Explanations for Eligible Rollover Distributions, on direct rollovers (irs.gov). Robby Welles, from his experience as a California insurance producer, on interest-crediting rates and terms, and on California educators and contract exchanges.