My previous employer was a university with a TIAA 403b. Now that it's been over a year since I left, I am interested in transferring some or all of those funds to Vanguard, with whom I've had a Roth IRA for well over a decade.

TIAA provides a dire warning that:

Your rollover may be subject to a 10% federal tax penalty if you were under age 55 when your employment ended and you’re under age 59 ½ when you take this rollover.

My research indicates that this penalty applies to the two tax-deferred annuity contracts within the 403b, and that I should not roll them over until I reach age 59 ½. Unless I misunderstand, my TIAA defined contribution plan (which also has two contracts) is safe to rollover.

A couple of points to consider:

  • I am younger than 55 years of age.
  • I've already maxed out the yearly contribution to my Vanguard Roth IRA.
  • I do not have any other IRA.

What rollover paths, if any, might I consider under these circumstances?

2 Answers 2


I've already maxed out the yearly contribution to my Vanguard Roth IRA.

You can rollover funds from a 401(k) or similar type account to a IRA without a tax implication as long as you don't change the flavor of the money.

That means Roth to Roth, and pre-tax to pre-tax. This will not cost you any money in taxes, it also doesn't count against your 401(k) or IRA annual limits.

If you change the flavor of the money from traditional to Roth, that will cost you in taxes. If you change it from retirement money to non-retirement money that will cost you in taxes.

Vanguard and TIAA should be able to help. Talk to both first, or check both websites. They will know what forms are needed and if they can do it directly or if a check is needed. You don't want the check made out to you, but in some cases the check for vanguard needs to be sent to your house and then you mail it to Vanguard.


Rollovers should not be subject to a penalty, because they are rollovers, not withdrawals.

Having said that... you keep on mentioning Roth IRAs. Rolling into a Roth requires that you pay taxes on the money in your 403(b), since that's now income.

OTOH, there's no tax (or withholding) if you roll the money directly from TIAA to Vanguard.

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