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403b and the retired-teacher-to-be

If you are a teacher, you have more than likely made the smart decision to participate in your school district’s 403b – the teaching profession’s equivalent of a 401(k) investment plan.

If you are a teacher and you are approaching 59 ½ years of age, a key investment decision regarding your 403b is on the horizon – a chance to make another savvy investment move that may dramatically impact your retirement future.

At 59 1/2, your 403(b) assets are ‘unlocked’, which means that you now have the ability to take control of your retirement funds, penalty-free. At 59 1/2, you can “roll-over” eligible monies into an IRA Rollover while still being able to contribute to your plan. Your employer will also be allowed to continue to match your contributions during the remaining years of your career, which will further help you build up your retirement nest egg.

The number one advantage of rolling your 403b assets into an IRA is that an IRA retirement plan gives you more control over how your assets are invested. By rolling over into an IRA, you will be able to demand that your assets are invested in alternative retirement vehicles designed to mitigate market risk and provide:

  • Principal Protection to safeguard your hard-earned retirement assets
  • The ability to lock in guaranteed growth rates from 6-8% compounded annually that you may access for a guaranteed lifetime income that you cannot outlive.
  • Reduced fees and expenses, which positively impacts your investment return potential. A 2009 study by Deliotte and The Investment Company Institute found the median administrative fee for high quality fixed income products to be 0.72% of assets annually. Additional fees may apply.

How to roll your 403(b) into an IRA

  • Work with WMP to select a financial institution that you wish to use for your money.
  • Request rollover paperwork forms from your plan administrator
  • Fill out the paperwork and send back in.
  • The check will be made payable to the Financial Institution For The Benefit of You. The check will typically be mailed to you at your home address. (Don’t panic. As long as you forward the check within 60 days it will not be a taxable event.)

It is extremely important to deal with professionals who have the experience to guide you through the process of rolling your 403b monies into an IRA. For over 10 years, we’ve helped teachers across the Metroplex take control of their retirement investing. WMP is here to help you make this smart move towards a stronger retirement. Give us a call to set up an appointment!

Cathy DeWitt Dunn, President of DeWitt & Dunn, LLC, is the driving force behind Women Money & Power. With decades of experience in the financial services industry, Cathy specializes in helping individuals and families strengthen their retirement outlook with lifetime income solutions not available from traditional brokerage houses. She has helped countless investors start their personal journeys towards a stronger retirement with strategies designed to protect principal, generate retirement income that can’t be outlived, and eliminate market loss.

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