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How do I move my 403b investment to my personal Roth account in order to pay the taxes due out of pocket


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I’m 60 years old. I have a 403b that is currently invested in a 6 year shield annuity. I’m in year three of the shield.I retired from teaching here in Milwaukee and now have a private sector side job that I’ve opened a tax deferred 401k with.  I also have my own personal Roth account. How do I move my investment in the shield annuity to my Roth account so that I can pay the taxes due out of my own cash savings to maximize what I can put into my Roth account. Do I need to surrender the shield annuity? 

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You'd need to talk to your 403(b) provider about distribution options and what the implications might be for the investment contract. As I understand it you'd like to take a distribution from your 403(b) account and convert it to a ROTH-IRA while paying any taxes due with funds you have outside of retirement accounts?

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  • 1 month later...

Dick-

This is quite doable because you do longer work for the employer that sponsored the 403(b)annuity plan.  Using the Direct Rollover option transfer your 403(b) account balance to the Roth IRA (use a no-load fund provider like the Vanguard Group of Mutual Funds).  To pay the tax you can just increase your withholding tax with your present employer.

You will have to pay the surrender charges left on the 6 year clock.  This voluntary transaction means you have surrendered the annuity contract.  This is a very wise decision-----you never should have invested in this 403(b) commissioned based annuity.  These high cost products eat into growth and should be outlawed.  Did you not have a no-load mutual funds choice?

Good Luck.

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