Can I use my 403(b) annuity to buy 'service years'?
In certain instances, you may be able to roll over 403(b) balances to purchase service years. According to CalSTRS, "Any active or inactive member who has previously received a refund of contributions or is entitled to purchase service credit may elect to roll over pre-tax funds from 401(a), 401(k), 403(b), 457 or traditional or conduit IRA plans." The amount rolled over cannot exceed the amount required to purchase the available service credit. You cannot purchase service credits with a plan rollover after you retire; it must be arranged before retirement.
You may want to make an appointment with a CalSTRS benefits counselor before deciding whether purchasing service credit with a 403(b) rollover would be beneficial for you. Visit CalSTRS for more information, or call 800-228-5453 for a telephone interview. If you are a CalPERS member, you may be able to purchase service credit with a 403(b) rollover, but the same conditions apply. Learn more at CalPERS or call the Customer Contact Center at 888-225-7377.
You should also check your 403(b) or 457 plan investments to determine whether any back-end sales charge (these are fees charged by mutual funds or variable annuities when you move or transfer your funds) or surrender fees (these are fees charged by fixed or variable annuities when you move or transfer your funds) would apply.
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