sweth,I can answer some of your questions, hopefully someone else can take up the slack.I left the money in that account, since I was told that I could not roll it over into the 401(k) my new employer provided.This is correct. 403b money cannot be transferred to a 401k, but it can be rolled over to an IRA.As I understand it, then, I wouldn't incur the early withdrawal penalty so long as I put the disbursement from the 403(b) into an IRA within 60 days; my current salary, however, is higher than the cutoff for the traditional IRA, so I would have to go to a Roth IRA.You do not "have to" go to a Roth IRA to roll over your 403b account. The salary limit prohibits you from contributing new money to an IRA, but the money you've already put into the 403b in the past can be put into an IRA without tax consequences.403b money cannot be rolled directly into a Roth IRA in any case--you would have to first roll it to an IRA, then convert that to a Roth, paying taxes (at your current rate) on the conversion.If you roll it into an IRA, you do have 60 days to make the deposit; however it is much better to do a "direct rollover" where the money is transferred directly to your IRA from the 403b and never passes through your hands (the 403b distribution check should be made payable to your IRA account, not to you). If the 403b distribution check is made payable to you, it is required that 20% be withheld for federal income tax, so when you put the money in the IRA you would have to come up with that 20% from your own pocket. You would get back what was withheld when you file your tax return.Also, my current employer is not matching contributions to my 401(k) yet, so I was planning on contributing to a Roth this year; would the rollover affect my ability to contribute?Your ability to contribute to a Roth is not affected by 401k participation one way or another. The determining factor is the income limits. The rollover, if you did it, would not be included in your income since it is money you had put away in prior years.Also, I assume that I would have to pay taxes on the Roth rollover, since otherwise I would be getting tax-exempt pre-tax savings; would this be at the rate I should have paid when I was contributing to the 403(b), or the rate I pay now?If you did the 403b-IRA-Roth conversion, you would indeed be taxed on the money converted to the Roth, at your current tax rate.And, finally, what advantage would I be gaining from rolling over to an IRA in the first place? I anticipate my salary increasing enough before retirement to make the change from tax-deferred to tax-exempt post-tax savings worth it, but in terms of accessibility of funds, etc., is there any reason to switch? (That is, did the person who originally told me to roll the funds over to an IRA, not knowing that I would have to go to a Roth, know what they were talking about?)Again, you do not "have to" go to a Roth, and in view of the taxes you would pay, it doesn't sound advisable to me that you do so. The advantage of rolling over to an IRA would be for greater flexibility of investment options if you aren't happy with the TIAA-CREF funds.The main thing I am not certain about is the IRA-to-Roth conversion, i.e. whether there are any penalties incurred as there would be for taking an IRA distribution before age 59 1/2.
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