Author Topic: Rolling Over a 403(b) into a Roth IRA  (Read 920 times)


  • 5 O'Clock Shadow
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Rolling Over a 403(b) into a Roth IRA
« on: February 19, 2019, 02:50:06 AM »
Would appreciate some advice on what to do with my 403(b) from a former employer. I have ~$12,500 in 403(b) designated Roth contributions, all after-tax. Iím not particularly keen on the current situation as I donít like how Mutual of America is managing the money nor the limited investment options they provide.

In addition to wanting more control and flexibility over how the money is invested, Iíd like to have access to this money in the next few years in case I need help with the down payment on a house/investment property. However, I figure Iíll wait at least another year or two for a likely downturn in the housing market. I donít like the idea of purchasing in a sellerís market. I should note that I will be a first-time homebuyer.
Iím trying to figure out my best option. It looks like I could roll it over into a Roth IRA and that I could withdraw funds from a Roth penalty and tax-free if theyíre used for purchasing a home as a first-time homebuyer. However, Iím not clear if that Roth IRA needs to be at least five years old in order to do so, as some of the reading Iíve done suggests. 

In addition to providing access to funds should I need them for purchasing a home, moving it out of the 403b into a Roth IRA  (likely through Schwab since I already have a traditional IRA through them) would give me more investing options.

As further background, I should note that I am 41, currently in the 12% tax bracket, single, no kids.

Does rolling my 403(b) over to a Roth IRA make sense or am I missing something?

Thanks in advance!


  • Senior Mustachian
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Re: Rolling Over a 403(b) into a Roth IRA
« Reply #1 on: February 19, 2019, 12:43:14 PM »
Only up to $10K for the home-buyer exception, but yes getting it out of the 403b and into a lower cost brokerage makes much sense.

See Roth IRAs: Distributions for more.