Corebridge Financial (VALIC / AIG) 403(b) Rollover to IRA Guide 2026

If you've worked as a teacher, hospital employee, university staff member, or nonprofit worker, there is a high probability that your 403(b) retirement savings are held through Corebridge Financial — even if you don't recognize that name. Corebridge Financial is the company formerly known as AIG Retirement Services (and, operationally, VALIC: the Variable Annuity Life Insurance Company). The company rebranded in stages between 2022 and 2023 after AIG took it public as a separate entity. The participant-facing portal — myaccount.valic.com — still carries the VALIC branding, so your statements, login page, and phone representatives may say VALIC or Corebridge interchangeably.

This guide is for anyone who left their job — or is considering leaving — and wants to roll their Corebridge 403(b) into a traditional IRA at Fidelity, Vanguard, Schwab, or another low-cost custodian. The process looks like any other 403(b) rollover on the surface, but there are two things that make Corebridge participants different: the product type question (variable annuity contract vs. custodial account) and the surrender charge structure that applies to many variable annuity holders. Getting these wrong costs real money.

Step 1: Identify your account type

Before you do anything else, you must determine which type of Corebridge account you hold. The rollover mechanics and cost implications are fundamentally different:

How to tell which you have: Pull your most recent Corebridge/VALIC statement. Variable annuity contracts show a "separate account" designation, list sub-account names (not plain fund names), and include a line for "mortality and expense risk charge" or "M&E charge" in the fee section. Custodial accounts show standard mutual fund tickers and NAVs with no annuity-layer fees. If you're uncertain, call 1-800-448-2542 and ask: "Is my 403(b) account held inside a variable annuity contract or a custodial mutual fund account?"

Variable annuity fee structure: what you're actually paying

VALIC's variable annuity products — primarily the Portfolio Director family — layer several cost components on top of each other. Most participants only see their sub-account returns, not the fees being deducted daily before those returns are calculated.

Surrender charges: the Portfolio Director structure

Unlike many variable annuity surrender charge schedules that apply a declining percentage to the total account balance over a fixed contract period, the Portfolio Director's surrender charge structure is based on recent contributions, not the contract's age. Specifically:

• Amounts withdrawn that exceed the 10% annual free-withdrawal amount are subject to a surrender charge if they consist of contributions made within the last 60 months (5 years)
• The surrender charge rate is 5% applied to the withdrawable amount subject to the charge²
• Surrender charges are generally waived in these circumstances: annuity payout option selected, disability, or account age exceeding 15 years from contract issue date

What this means practically: if you've been contributing to your VALIC 403(b) continuously, you likely have contributions from the last 60 months that are subject to the 5% charge on amounts exceeding 10% of your account value. Unlike a traditional 7-year CDSC schedule that resets only when you add new money, this structure means the "window" rolls with your contribution history — recent contributions are always in it. The only way to exit cleanly is to wait 60 months after your last contribution, which typically means separating from your employer and stopping contributions, then waiting 5 years.

Interactive fee calculator: VALIC variable annuity vs. rollover IRA

Enter your balance, estimated surrender charge amount, current M&E plus sub-account cost, and destination IRA cost to see the annual savings and break-even timeline.

403(b)-specific rules to check before initiating a rollover

A Corebridge 403(b) rollover has the same eligibility triggers as a 401(k) — separation from service, age 59½, disability — but three 403(b)-specific considerations require attention before you initiate:

1. IRS Rev. Proc. 2007-71 in-service transfer restrictions

If you are still employed and want to move your VALIC annuity contract balance to a different 403(b) provider while still working (a "vendor-to-vendor" or "90-24 transfer"), IRS Rev. Proc. 2007-71 requires the receiving contract to contain distribution restrictions at least as stringent as the sending contract's restrictions.³ In practice, this means you can only transfer annuity contract balances to another approved annuity contract provider — not to a custodial account or an IRA — while still employed, unless your employer's plan document specifically permits otherwise. Most K-12 and healthcare plan documents permit custodial account transfers under certain conditions; check with your plan administrator.

Takeaway: If you have left your employer, this restriction is moot — you have a distributable event and can roll to any eligible IRA directly. If you are still employed and want to escape VALIC fees, talk to your employer's HR or benefits administrator about whether your plan permits an in-service vendor transfer.

2. The 15-year service catch-up (before you roll out)

Employees with 15 or more years of service at the same 403(b) plan sponsor may be eligible for an additional elective deferral of up to $3,000/year (up to a $15,000 lifetime cumulative limit) under IRC § 402(g)(7).⁴ This is a 403(b)-only provision unavailable in 401(k) plans. If you qualify and are still contributing, rolling out of the plan and into an IRA eliminates this catch-up opportunity going forward. For teachers or hospital employees close to the $15,000 lifetime cap, max out the catch-up before separating if possible.

3. RMD sequencing for participants 73+

If you are age 73 or older (born 1951–1959) or age 75 or older (born 1960 or later per SECURE 2.0 § 107), take your required minimum distribution from the Corebridge plan before initiating the rollover. IRC § 408(d)(3)(E) bars rolling RMD-eligible amounts — doing so creates an excess IRA contribution subject to a 6% annual excise tax until corrected.⁵

ERISA vs. non-ERISA 403(b): why it matters for your rollover

Unlike 401(k) plans, which are always subject to ERISA, many 403(b) plans are exempt from ERISA entirely. This distinction affects creditor protection — the most important reason some people keep rather than roll their 403(b) balance.

If you have an ERISA 403(b) with a large balance (above ~$1.7M), rolling to an IRA downgrades your creditor protection from unlimited to the federal bankruptcy cap. Most participants are below this threshold, but if you're a physician or attorney with significant liability exposure and a large plan balance, this trade-off deserves explicit analysis before rolling.

Stay-vs-roll decision: when keeping the Corebridge plan makes sense

Most participants leaving a VALIC/Corebridge plan benefit from rolling to a low-cost IRA. But five situations make the calculation more nuanced:

1. You're within 1–2 years of clearing the 60-month contribution window. If your last contribution was made 4 years ago and you stopped contributing when you left your job, waiting another 12 months eliminates the surrender charge entirely. Run the fee-drag calculator above — does paying the surrender charge today recover faster than waiting out the clock?
2. Rule of 55 applies. If you left your employer at age 55–59½, you may have penalty-free distribution access from the employer plan under IRC § 72(t)(2)(A)(v). Rolling to an IRA before age 59½ forfeits this access — any IRA distribution before 59½ triggers the 10% early withdrawal penalty unless an exception applies. See Leave 401(k) vs. Roll to IRA and SEPP/72(t) Guide for the tradeoff analysis.
3. You have an ERISA 403(b) and a balance above ~$1.7M. The unlimited ERISA creditor protection may be worth more than the fee savings — particularly for healthcare workers, attorneys, and others with elevated professional liability exposure.
4. The 15-year service catch-up is not yet exhausted. If you're still employed and have not hit the $15,000 lifetime limit under IRC § 402(g)(7), rolling out immediately costs you future catch-up contribution room permanently.
5. You hold backdoor Roth–poisoning pre-tax balances but lack a plan to absorb them. Rolling a large pre-tax Corebridge balance to a traditional IRA adds it to your IRA pool, making future backdoor Roth conversions partially taxable via the pro-rata rule. If you don't have a new employer's 401(k) to absorb the balance via reverse rollover, consider the pro-rata impact before rolling. See Pro-Rata Rule Guide.

Step-by-step: rolling your Corebridge 403(b) to an IRA

1. Confirm your account type and product. Log in to myaccount.valic.com or call 1-800-448-2542. Confirm whether you have a variable annuity contract or a custodial account. If a variable annuity, get your current surrender charge exposure in writing.
2. Check for outstanding RMD obligations. If you're age 73+ (born 1951–1959) or 75+ (born 1960+), confirm whether a required minimum distribution is due for the current calendar year before rolling. The plan can calculate and segregate the RMD if asked explicitly.
3. Check for non-governmental 457(b) plan contamination. If your employer offered both a 403(b) and a governmental 457(b) plan, the 457(b) is eligible to roll to an IRA. A non-governmental 457(b) is NOT. Confirm which plan each balance came from before initiating.
4. Open the receiving IRA. Open a traditional rollover IRA at Fidelity, Vanguard, Schwab, or your chosen custodian before contacting Corebridge. Obtain the account number and the incoming rollover/transfer form from the new custodian — many will initiate the transfer on your behalf via a direct-transfer request.
5. Initiate a direct rollover — not an indirect rollover. Request a "direct rollover" with the distribution check payable to the receiving IRA custodian FBO your name. Never take a check payable to yourself — employer plan distributions made to you are subject to mandatory 20% federal withholding under IRC § 3405(c). A direct rollover eliminates the withholding. See 60-Day Rollover Rule for the withholding mechanics.
6. Complete the Corebridge rollover/transfer-out form. The standard form is available at myaccount.valic.com under Forms, or via your plan sponsor's HR portal. For variable annuity surrenders, you'll be selecting "Surrender" or "Rollover" and specifying a direct rollover payable to the new custodian. Sign and submit with your new account information.
7. Timeline: Custodial account rollovers typically complete in 2–4 weeks. Variable annuity surrenders at VALIC/Corebridge typically take 7–21 business days after complete paperwork is received. If you experience delays, call 1-800-448-2542 and ask for the transfer status — your receiving custodian's rollover specialists can also follow up on your behalf.
8. Update beneficiary designations at the new IRA. Corebridge beneficiary designations do not transfer. Set them explicitly at the new custodian immediately after the rollover completes. Your IRA beneficiary designation overrides your will — see IRA Beneficiary Designations After Rollover.

Pro-rata rule: rolling pre-tax Corebridge balance to a traditional IRA

If you use the backdoor Roth IRA strategy, rolling a pre-tax Corebridge 403(b) balance to a traditional IRA adds it to your IRA pool and creates a pro-rata problem. The IRS aggregates all traditional, SEP, and SIMPLE IRA balances on December 31 of the year you convert to calculate the taxable fraction of any Roth conversion. A $200,000 pre-tax rollover IRA pool with a $7,500 backdoor Roth contribution means roughly 97% of each conversion is taxable.

The fix: Roll the pre-tax 403(b) balance into a new employer's 401(k) instead of an IRA, keeping the IRA pool clean for future backdoor Roth conversions. See Reverse IRA Rollover: IRA Into a 401(k) for the mechanics. Note: not all employer plans accept incoming rollovers — confirm eligibility with your new plan administrator before assuming this option is available.

5 common Corebridge / VALIC rollover mistakes

1. Rolling to a new VALIC/Corebridge IRA annuity. When you call to initiate a rollover, Corebridge may suggest rolling your 403(b) into a Corebridge IRA — which is typically a variable annuity product. This replaces your 403(b) annuity with an IRA annuity, preserving the M&E charge and potentially starting a new surrender charge window. You are not required to do this. State clearly at the start of every call: "I want a direct rollover to [new custodian name] IRA, account number [___]. Please provide the paperwork to authorize this transfer."
2. Taking an indirect rollover from a 403(b). Any distribution from a 403(b) employer plan paid directly to you — rather than directly to a receiving IRA custodian — is subject to mandatory 20% federal withholding under IRC § 3405(c). You then have 60 days to deposit the full pre-distribution amount (including the 20% withheld) from your own pocket into an IRA to avoid taxes and penalties. This is the most expensive mistake — and easily avoided with a direct rollover instruction on your paperwork.
3. Ignoring the surrender charge on recent contributions. The Portfolio Director's 5% charge on contributions made within the last 60 months is easy to underestimate if you've been contributing steadily. In the year you leave your job, all contributions from the last 5 years are potentially subject to the charge on amounts exceeding the 10% free withdrawal. Run the fee-drag calculator before assuming a rollover pays off immediately.
4. Not checking whether your plan is governmental 403(b) or non-ERISA. Public school teachers in some states have 403(b) accounts that are non-ERISA plans with state-law creditor protection that varies widely. If you're a public employee, your post-rollover IRA creditor protection may differ significantly from your current plan protection — particularly if you live in a state with limited IRA creditor exemptions.
5. Missing the RMD before rolling. Participants age 73+ (1951–1959) or 75+ (1960+) must take the year's RMD from the Corebridge plan before rolling the remainder. The plan processes distributions as rollovers or partial distributions — if you don't explicitly ask them to segregate the RMD first, the full amount may be treated as a rollover and the RMD amount could end up as an excess IRA contribution, triggering a 6% annual excise tax until corrected.