An eligible distribution of pre-tax 403(b) assets can generally be rolled directly into a Roth IRA. The previously untaxed amount is generally taxable income for that year. This is a Roth conversion, not a way to make the existing pre-tax balance tax-free immediately. It may fit some retirement plans, but leaving money in the plan or making a tax-deferred rollover can also be appropriate.
Check permission to move the money
Ask the administrator whether your plan permits a distribution now and whether the proposed amount is eligible for rollover. Separation from employment and reaching age 59½ are common distribution conditions, subject to plan terms. Being employed does not automatically prohibit every rollover, but choosing a Roth IRA does not create a right to an in-service distribution. Hardship withdrawals and required minimum distributions are examples of ineligible amounts.
Identify the source of every dollar
- Pre-tax contributions and earnings: the amount converted generally enters taxable income in the conversion year. It is not only the investment earnings that are taxable.
- Designated Roth 403(b) money: an eligible rollover to a Roth IRA is generally a different transaction from converting pre-tax assets. Keep records of contributions, earnings, and holding periods.
- Other after-tax contributions: basis and earnings require separate allocation and reporting. Ask the administrator and tax preparer to verify instructions before trying to move only the tax-paid portion.
Compare a full conversion, a partial conversion, and no conversion
Request a tax estimate for each alternative using your income and cash needs. Consider how much tax would be paid now, what funds would pay it, when you expect withdrawals, and what future tax assumptions would need to be true. A smaller eligible conversion can limit the immediate income increase, but there is no universally correct amount. Do not treat an expected future tax rate or investment return as certain.
Hypothetically, a $30,000 pre-tax conversion entirely subject to an assumed 22% federal marginal rate would add $6,600 of federal income tax. This simplified illustration excludes state taxes and changes to brackets, deductions, credits, benefits, or premiums. An actual estimate may be materially different. Compare the tax cost with money you need soon instead of assuming the Roth balance makes the cost disappear.
Also compare total account and investment costs, available services, plan features, and applicable protections. A wider IRA menu does not establish that the IRA is cheaper or that the investments will perform better. There is no single best destination for every 403(b).
A direct rollover avoids withholding, not conversion tax
For an eligible direct rollover, have the administrator pay the receiving Roth IRA under its instructions. The mandatory withholding that generally applies to a taxable eligible distribution paid to you does not apply to the direct rollover. The taxable conversion still must be reported and its tax paid.
If the distribution is paid to you, 20% federal withholding generally applies to the taxable eligible amount, and the rollover ordinarily must be completed within 60 days. To move the full distribution, replace withholding with other funds within that deadline. Amounts not rolled over may face an additional early-distribution tax. A completed eligible conversion itself is not generally subject to that 10% additional tax.
Two different Roth IRA five-year rules matter
Tax-free treatment of Roth IRA earnings generally requires the five-tax-year period measured from the first tax year of a contribution to any Roth IRA for you, plus age 59½ or another qualifying condition. Age 59½ alone does not satisfy that earnings holding-period requirement. Time in a designated Roth 403(b) does not count toward the Roth IRA holding period.
Separately, each taxable conversion or certain rollover has a five-year period relevant to the 10% additional tax on early withdrawal of converted amounts. Exceptions can apply, including age 59½. This clock is different from the qualified-earnings rule. Converted assets should not be described as ordinary Roth contributions that are automatically available without penalty at any time.
Roth IRA distributions generally come out in an ordering sequence: regular contributions, conversion and rollover amounts, then earnings, with further rules within conversions. Keep records and check a proposed withdrawal with a tax professional. A conversion may also forfeit access to a plan-specific early-distribution exception that does not apply to IRAs.
RMDs and beneficiaries
Roth IRAs do not require owner-lifetime minimum distributions. Designated Roth employer-plan accounts also have no owner-lifetime RMDs for 2024 and later, so avoiding them is not a unique reason to move an already-Roth 403(b). Pre-tax plan RMDs follow their applicable rules and cannot be converted. Inherited Roth accounts still have beneficiary distribution requirements; an inheritance is not an unrestricted promise of tax-free growth forever.
Before requesting a conversion
- Confirm eligible amounts and receiving account details with both institutions.
- Compare the proposed conversion with staying in the plan, using another accepting employer plan, or using a traditional IRA.
- Resolve near-term cash access, fees, and tax-payment arrangements before transferring assets.
- Retain confirmations and tax forms; confirm receipt and the intended tax characterization. Seek individual advice before acting.
Sources checked November 4, 2026
The original publication date is retained. This corrected edition replaces outdated or incomplete explanations; it does not establish that a rollover or conversion is appropriate for a particular reader.
IRS Publication 571: 403(b) plans
IRS: Rollovers of retirement plan and IRA distributions
IRS Topic 413: Rollovers from retirement plans
IRS Publication 590-B: Roth IRA distributions
IRS: Required minimum distributions FAQs
IRS: Exceptions to tax on early distributions
This material is for general educational purposes only and is not individualized investment, tax, or legal advice. Investing involves risk, including loss of principal. Consult your financial, tax, and legal professionals about your circumstances before acting.