In-Plan Roth Rollover
When taking an eligible distribution (as defined below), you may elect to convert all or a portion of your Plan Account (other than your Roth Contribution Account) to a Roth Contribution Account as an In-Plan Roth Rollover. This Rollover actually occurs within the Plan. You do not receive a check and then contribute it to the Plan. An eligible distribution is (i) a distribution to an active Member on or after attaining age 65; (ii) a distribution made upon termination of employment, becoming disabled,
or retirement; (iii) a distribution upon the Member’s death; or (iv) any distribution that would otherwise qualify as an eligible rollover distribution.
A key benefit of a Roth 403(b) is the potential for federally tax-free earnings and withdrawals. Converting to a Roth 403(b) can be beneficial if you expect your tax rate to increase in the future, because you pay taxes on the money you convert now. You are advised to consult a tax advisor to better understand these requirements. The full amount of any conversions to a Roth 403(b) processed in a calendar year will be considered taxable income in that calendar year.