Updated August 25, 2026. Quick answer: An exchange inside the same 403(b) plan is not a distribution, so no income tax and no additional tax fall on it and the surrender charge is the entire cost of moving. That makes the decision one division: the one-time charge, over what the cheaper product saves each year. Enter your balance, your surrender rate, the years left and the two annual costs, and this returns the break-even in months and what waiting instead would cost.
What is usually said, and what the sources say
A general annuity surrender calculator answers a three-part question: the charge, the income tax on the gain, and the additional tax before 59 and a half. Applied to a teacher moving inside the plan, two of those three are not zero by luck – they are zero by regulation, and including them overstates the cost of leaving.
For an exchange inside the same 403(b) plan the regulation says the transfer is not treated as a distribution and no amount is includible in gross income. So the surrender charge is the entire cost, and the only question left is how long the cheaper product takes to pay it back. That is one division, and this computes it.
Why this is not the annuity surrender calculator
Leaving an annuity normally costs three separate things, and our annuity surrender calculator prices all three: the surrender charge, the income tax on the gain, and the additional tax before 59 and a half.
Moving between two contracts inside the same 403(b) plan is a different act, and two of those three fall away by regulation rather than by luck. “Neither a plan-to-plan transfer nor a contract exchange permitted under this paragraph (b) is treated as a distribution for purposes of the distribution restrictions”, and “no amount is includible in gross income by reason of such a transfer or exchange” (26 CFR 1.403(b)-10(b)(1)(i)). Nothing is distributed, so nothing is taxed. Using the three-part calculator on an in-plan exchange overstates what leaving costs, and overstating it is the error that keeps people in the contract.
So the whole decision is one division: the one-time charge, over what the cheaper product saves each year. That is what this computes, along with the alternative — waiting out the schedule and paying the higher cost while you wait.
The calculator
Your break-even
Five numbers, all from your own statement and your own contract. Nothing is assumed and nothing is prefilled.
The two annual cost figures are the ones published per product in California’s registry, where “Annual cost for this product is based on a $10,000 balance and assumes you are invested in one fund. It includes required product fees, and also applies the average expense ratio of all investment options.” (CalSTRS 403bCompare, product page footnote). If your product is in that registry you can read both numbers off it. If it is not, your statement and the prospectus are where they live.
Check the plan against the rest of your retirement savings
A 403(b) decision usually turns on what the product costs, what leaving it would cost and what else you are saving into, and an adviser can weigh those together.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide is paid when you submit the form, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here. You stay on this page.
What happens when you press the button
It asks about nine questions (age, investable assets, location), then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button. Submitting the form does not guarantee an adviser or a match. This matching form is not tax or legal advice.
What the numbers look like in this registry
For orientation only, and not as a default: across the active list the annuity products that publish an annual cost have a median of $209 per $10,000 a year, the fund products a median of $143.50, and 13 products come in at $100 or less. The median published surrender schedule opens at 8 percent and runs 8 years; the longest runs 16.
| Surrender rate you are in | Charge on $50,000 | Annual saving at the two median costs | Break-even | In years |
|---|---|---|---|---|
| 2% | $1,000 | $765 | 16 months | 1.3 years |
| 4% | $2,000 | $765 | 31 months | 2.6 years |
| 6% | $3,000 | $765 | 47 months | 3.9 years |
| 8% | $4,000 | $765 | 63 months | 5.2 years |
| 10% | $5,000 | $765 | 78 months | 6.5 years |
Worked at the registry’s own medians: $209 a year per $10,000 for the annuity products that publish a cost, against $56 for CalSTRS Pension2 – Personal Wealth Plan, both scaled to a $50,000 balance. Your own two numbers replace both.
The table is worked at those medians so the shape is visible before you have your own numbers. It is not a prediction about your contract. The surrender-charge page has the full schedules and the source for each one.
What this page does not settle
This tool computes a break-even from five numbers you supply. It is not a quote, a projection, or advice to move.
This computes the break-even on a move inside the plan. If you are taking the money out instead – after severance, or in cash – the tax and the additional tax come back, and the calculator that handles those is our annuity surrender one, linked below.
It applies your surrender percentage to your balance. If your contract applies its percentage to original premiums, or to whichever of the two is greater, or lets a free-withdrawal amount out first, the true charge differs and only your contract says by how much.
It compares two annual cost figures you supply. The registry’s figures are a standardised $10,000-basis comparison, not a quote, and the two products’ costs may not scale identically with your balance.
Sources
- 26 CFR 1.403(b)-10(b)(1)(i) — https://www.law.cornell.edu/cfr/text/26/1.403(b)-10
- CalSTRS 403bCompare, product page footnote — https://www.403bcompare.com/Products/54
- CalSTRS 403bCompare product registry, fetched 2026-08-25 — https://www.403bcompare.com/ProductCompare
Related: 403(b) Surrender Charges · 403(b) Contract Exchange · Why a School District’s 403(b) Vendor List Is Mostly Annuities · Annuity surrender calculator · Fee drag calculator · What happens to your 403(b) when you leave.
General information drawn from the federal statutes and regulations, the California Education and Insurance Codes and the CalSTRS 403bCompare registry named above, not legal, tax or financial advice. Statutes are amended and registered products change; the figures here are what each source said on the date above, and each is linked so you can check it.
More Life Insurance Decisions guides: see the full 81-page index.