What to Do With a 403(b) After Leaving a District
What to Do With a 403(b) After Leaving a District
The Challenge
Sarah worked in LAUSD for 11 years before moving to a county office position. She wasn’t sure what she should do with her old 403(b):
- Should she leave it where it was?
- Should she roll it over?
- Would fees change?
- Would transferring trigger taxes or penalties?
She received conflicting advice from coworkers, making the decision even harder.
The Process
I walked Sarah through a side-by-side comparison of her options:
- Leaving the account where it was
- Rolling it into a new 403(b)
- Transferring it into an IRA
- Using an insurance-based guaranteed income option
We evaluated fees, risk exposure, tax rules, and the long-term impact of each choice. I also contacted the provider to uncover hidden details not clearly listed on her statements.
The Results
Sarah chose a rollover strategy that eliminated fees she didn’t realize she was paying.
By reallocating her account into a more efficient setup, she reduced her annual expenses by 1.7%, which created an estimated additional $62,000 over her retirement horizon.
For the first time, she felt confident that her old account was working for her, not against her.
Key Takeaways
- Changing jobs doesn’t mean leaving money behind.
- Old 403(b) plans often have outdated or expensive structures.
- A rollover review ensures your retirement savings remain optimized.
- Proper guidance prevents costly tax mistakes.
403(b) Confusion? You’re not alone.
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