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403(b) Rollover Options in 2026: Rules, Strategies, and What MA Educators Need to Know

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By Tim Hayes, Financial Advisor for the Public and Not-for-Profit Sector

Your Protection: If the rollover doesn’t clearly improve your situation, the law—and my practice—dictates that we don’t do it.

Social Security Advisor in Boston

The Game Has Changed: The WEP/GPO Repeal

For 40 years, Massachusetts educators were penalized for their public service. That era has ended.

  • WEP Repeal: You now receive your full earned Social Security benefit from other jobs or prior careers. No more “Windfall” cuts.

  • GPO Repeal: This is the nice payday. Most MA teachers previously saw their spousal or survivor benefits reduced to zero. Now, you are eligible for the full benefit—often adding $800–$1,200+ per month in guaranteed income.

What This Means for Your 403b Rollover and Retirement Savings

  • The Strategic Shift: Many educators were enrolled in high-fee 403(b) annuities because those were the only plans available in the school system. Now that the Fairness Act has boosted your Social Security, you have a much larger financial “cushion.”

  • This extra income gives you the freedom to move away from restrictive, guarantee-based products and pivot toward a lower-cost strategy focused on growth and legacy.

IRMAA Planning and Roth IRA

At age 65, most retirees enroll in Medicare, including Part B for outpatient care.
The cost of Part B is typically deducted from Social Security payments. However, your income level can affect your premium amount. This connection is important because it is where Roth IRAs may be relevant when considering a 403 (b) rollover.
Because Roth withdrawals are not counted as income for IRMAA, we review the current IRMAA tables together. By projecting your potential IRMAA status, we help determine if moving some or all of your 403b rollover into a Roth IRA could benefit your future premiums.

A Higher Legal Bar: the Best Interest Standard for Rollovers

When you retire and we discuss a direct rollover, the bar is raised significantly. We move from the “Suitability Standard” (which allowed high-fee annuities) into the Department of Labor’s (DOL) Best Interest Standard.

  • The Rollover Reset: A rollover recommendation today must clear a much higher bar. Under modern “Best Interest” standards, we aren’t looking for “just okay”—we are looking for a provably more efficient, lower-cost way to manage your retirement assets.

  • The “Reason Why” Documentation: I am required to provide you with a written comparison of your school plan’s fees and investments compared directly to those of the new IRA.

Read More: How Financial Advisors Get Paid: Fees, Commissions & Fiduciary Advice

Your Two 403b Rollover Options for 2026

I believe the way you pay for advice should match the service you actually need. I offer two distinct paths:

  1. Ongoing Management: Best if you want a partner for long-term fiduciary oversight, active rebalancing, and professional coordination of your IRA or employer plan assets with your MTRS pension and Social Security.

  2. The One-Time Commission: Best if you want to move out of your school’s high-fee 403(b) and into a world-class portfolio without a recurring management fee. You “own” the allocation and maintain your account without an annual advisory charge.

When you leave your employer, you can also leave your 403(b) for a better option in a Traditional IRA →

Request a Free Intro Call Reach out to Tim to schedule a free virtual meeting and find out if his services are right for you.

Path 1: Ongoing Management with Full Fiduciary Oversight

This is an advisory relationship where I manage the day-to-day logistics of your portfolio so you don’t have to.

  • Fiduciary Oversight: A fee-based model where I act as a fiduciary to keep your risk aligned with your retirement timeline.

  • Lower Internal Costs: I prioritize low-cost Index Funds and ETFs to keep your total investment expenses as low as possible.

  • The Pershing Advantage: Your assets are held securely at Pershing (Bank of New York Mellon). This gives us “Open Market” access to over 10,000 mutual funds and ETFs, far beyond any school district’s limited list.

  • Active Management: I am responsible for building your allocation, monitoring market shifts, and rebalancing your accounts.

  • Strategic Distributions: When you need income, I decide which specific assets to sell to maintain your portfolio’s health, rather than just liquidating whatever is on top.

Path 2: One-Time Implementation

  • The “Slice of the Pie” Management: Unlike most funds that rely on the “whims” of a single star manager, American Funds uses a multi-manager system. Each fund is divided among several independent managers who each manage a separate “slice” of the portfolio. This ensures your retirement isn’t dependent on one person’s opinion; instead, it’s a blend of the highest-conviction ideas from a diverse team.

  • Well-Suited for Retirees (Growth & Income): Most retirees with a pension need a blend of growth to outpace inflation and income to supplement their lifestyle. American Funds’ specialty is this “Growth and Income” mix, providing a stable core for your 403(b) rollover.

  • The “Big Rollover” Advantage: Through Rights of Accumulation (ROA), the bigger the rollover, the lower the sales charge. We focus on utilizing the size of your rollover to hit lower-cost “breakpoints” on day one. While the sales charge reaches 0% (NAV) at the $1 million mark, the costs drop significantly at levels like $250k and $500k.

The Cost Comparison: DIY vs. Professional Help

The absolute lowest-cost option is a do-it-yourself (DIY) rollover to a low-cost provider like Vanguard or Fidelity.

But here’s what they won’t do:

  1. Maximize your new Social Security benefits—a decision worth tens of thousands over your lifetime. 

  2. Provide structured guidance for a major, one-time investment. Moving a large sum amid market uncertainty requires a plan to manage sequence-of-returns risk and your own peace of mind. I help implement a prudent strategy (like systematic investing) based on your personal risk tolerance.

  3. Coordinate it all into one personal income plan with your MTRS pension.

My value is in executing a strategic, behaviorally sound transition, not just a paperwork shuffle.

I offer two professional alternatives: my One-Time Commission setup or my Ongoing Management service.

I Immediately Felt I Was in Good Hands

“I was fortunate to get a recommendation for Tim Hayes from a colleague many years ago, and I have benefitted greatly from our partnership. At our first meeting, I immediately felt that I was in good hands. Tim is a wonderful listener, and he asked great questions that allowed me to focus my long-term financial goals. He has always been very responsive to any questions I have had and keeps me informed about the impact the vagaries of the investment world have on my portfolio while, at the same time, giving me advise on our next steps. I would highly recommend Tim to anyone needing investment services. Both his knowledge and his thoroughness are refreshingly impressive.”

Phyllis Gleason

Client: Retired College Administrator

Testimonial Disclosure: Testimonials are based on individual client experiences and may not represent the experiences of all clients. They are not a guarantee of future performance. Each client’s situation is unique. No compensation has been provided for these testimonials.

Read More Client Testimonials

Navigating Massachusetts-Specific Rules

The 2009 IRS rules turned 403(b) accounts into employer-sponsored plans, making them far more cumbersome to manage. I handle that administrative burden for you.

  • TPA Management: Whether your district uses OMNI or TSACG, I manage the paperwork and the process to ensure a seamless transition.

  • Sick Time Buy-Backs (Boston Only): For Boston educators, I help you maximize your final 403(b) deferral to shield your sick time buy-back from the IRS.

  • Full Control: A rollover moves your money into an environment where you have full control over assets and beneficiary designations.

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    Is a 2026 Rollover Right for Your Current Retirement Plan?

    • Creditor Protection: Under federal law (11 U.S.C. § 522(n)) and MA State Law (MGL Ch. 235 § 34A), funds rolled from a 403(b) into an IRA maintain protection in bankruptcy court. You aren’t giving up a shield; you are moving it to a different bucket.

    • The “Rule of 55”: If you are under age 59½, we must check if you need “Rule of 55” access to your current plan. Once rolled into an IRA, you generally wait until 59½ to avoid the 10% penalty. We ensure you have enough liquid cash set aside elsewhere so this is never an issue.

    Financial Advisor Tim Hayes

    403(b) Rollover Consultation — $200/hr

    I'll show you your current 403(b) fees, what lower-cost rollover options could save you, and review whether your allocation needs updating for retirement and your new Social Security benefits.

    "My goal is to ensure your retirement plan is built on your best interests, not a product sale."

    Book a consultation ($200/hr)  or call  508-277-5847  to schedule.

    These are the opinions of Financial Advisor Tim Hayes and not necessarily those of Cambridge Investment Research. They are for informational purposes only and should not be construed or acted upon as individualized investment advice. Content provided via links to third-party sites should not be considered an endorsement of content that we cannot verify completeness or accuracy of.

    Reach out to find out if Tim's services are right for you.

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    2. Massachusetts 403(b) Tax Trap: How to Avoid Double State Tax on Pre-1998 Contributions
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