Hi @hank
Thank you for your added information.
NOTE: this conversation is not fully in line with this post subject,except to the point of current and/or future taxation regarding the tax status of retirement monies, as to how variations exist within state jurisdictions, aside from whatever personal taxable status may exist at the federal level.
A few pieces of info from 2012 regarding the "new pension tax" in Michigan. Hank, the below item 1 is part of what did cause confusion, from wording within the new tax code, with some pertinent wording in bold by me.
--- 1. Payers Subject to the New Withholding Rules, Michigan (note: there was a last minute scramble to provide payers with withholding instructions for the new calendar year 2012, as the Michigan Supreme Court had just ruled on the Constitutional status of taxing pensions for a narrow portion of the population (read, those born between 1946-1952
)
Only those subject to Michigan jurisdiction are required to withhold Michigan income tax under the new rules. Other payers need not withhold, even though the payee resides in Michigan.
The Withholding Guide refers to the pension “administrator” as the person responsible for withholding. If the administrator is registered with Michigan Department of Treasury only for reasons other than withholding, the administrator must register again as a “pension administrator.” It is not entirely clear whether an administrator who administers payments to one person from more than one plan would have to aggregate the payments for withholding purposes. Analogy to federal law would indicate that aggregation is allowed but not required.
Mandatory Use of the MI W-4P
As mentioned above, the State of Michigan's current position is that an administrator must withhold at the prescribed rate unless the participant provides different instructions on a MI W-4P. We understand that a number of payers are disregarding that position and are continuing to use their own version of the W-4P.
Next for item 2, is a short reply to friends and family at the time (2012) asking what the hell is going on with this new pension tax. Do not imply I retain a bias favoring one political party over another. This is not the case. However, at the time; this form of tax legislation was a strange path for a Republican controlled state government. Thus, the words to help identify the pathway of the legislation for those asking the questions of me (as in, who the hell promoted and favored this legislation?).
--- 2.
I had several email exchanges with legislators, including the Lt. Governor and the state Treasurer during the beginning of this process.
The tax came to birth when the Republicans decided to reduce some business taxes.
The overview:
1. Reduce some business taxes and companies will hire more people and/or new companies will move to Michigan.
2. Michigan's budget is required to be balanced.
3. So, if one is reducing business taxes by $1.6 billion dollars, this needs to be offset from some other source.
4. Thus, the tax the pensions came to be as a source to recover the lose revenue to the state.
The legislation was introduced by a Republican, the final passage was supported by enough Republicans, with the exception of a tie vote in the MI senate, with the tie breaking vote being cast by the Lt. Governor and signed by Gov. Snyder.
The legislation was challenged in court as unconstitutional and eventually traveled to the MI Supreme court for a final decision. The court at the time was Republican dominated. The legislation was passed with a 4-3 vote as not violating the constitution.
Summary: many republicans were not in favor of this tax, but enough voted in favor to set up the tie breaking vote by the Lt. Governor and of course, favored by Gov. Snyder.
My main points in email exchanges (my opinions,2011) with legislators from both political parties were:
1. that whatever amounts would be taken away from retirees in tax, would be monies not spent locally to support those businesses.
2. the tax was targeted at a specific group (baby boomers) does violate tax code by age discrimination
3. those voting in favor are targeting their own retired parents and/or grandparents...duh!
4. a number of Michigan residents will indeed retire to a state that does not tax pensions......this has take place to some extent, so the tax money is forever gone from Michigan, as these "snow birds" stay long enough in another state to claim residence in that state as a taxpayer; although they may return to Michigan during the warmer months. (2019 update, this indeed has taken place in larger numbers; so Michigan has lost this tax base from pension monies)
This link takes you to the legislation path:
https://votesmart.org/bill/13363/35098/tax-exemption-and-pension-bill#.XgiijGYyeM_
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Lastly, Hank; wife and I both receive defined pensions from payers not domiciled in Michigan. We have taxes "only" withheld from 1 pension for federal taxes, so as to not "hit" the federal underpayment penalty box at tax time. No Michigan taxes are withheld from either pension. Generally, we pay the remainder of federal and state taxes owed when filing taxes in the next year, without underpayment penalty. As noted in my previous post, Fidelity only asks; for my IRA RMD, as to whether I choose to have any federal or state tax deducted (tell us how much or none).
Take care,
Catch

I own 6 bond funds (words that I never ever expected to hear coming out of my mouth) but all in an Roth IRA to avoid paying taxes on the income generated by them. All have greater than 4% yields, 5 of them twice as much. (FWIW: IOFIX, BIT, PCI, PDI, PFN, PTY). I am not suggesting that you buy any of them, especially the CEF's.
For your "taxable" account might you not fair better by looking at a muni bond fund or something like a dividend growth fund (e.g. VDIGX, but there are many others) where the income might be at least partly qualified and thus possibly sheltered from the tax man? I'm guessing that you 'need' the income in your taxable side and prefer not to draw down your IRA account(s).

Well, actually: I won't live forever. I have thought and thought, and waited and waited to pull the trigger on my T-IRA. Drawing-down the T-IRA just 3k or 4k each year actually gives me a 50-year window of time before it's all converted from tax-sheltered into whatever new taxable accounts I create. Wifey's agenda is NOT to stay Stateside after my demise. The more I put into a taxable account, the more she'll have readily available, without worrying about the arcane, convoluted tax rules. Whatever she inherits within a T-IRA, she'll have to wait until 59 and a half to get at it, without burning up a quick and instantaneous 10% tax penalty.
This is do-able, and the more she has sitting in a taxable account, the better. At this point, we don't need to worry much about sheltering big profits and worrying about a sizable income. We've relocated to where we want to be for now. A dream come true, though we don't by any means live in a palace. Extended family is here to be of help, and they're great. Wifey will get a car, I won't even bother. 4 cars, in a single household. People are busy, just not ME. I can use my bus pass anytime to see ALL of Oahu, unlimited. I could circumnavigate Oahu on the bus every single day if I want! The senior yearly bus pass is less than one-twelfth of a standard annual pass. That's the difference between groceries or no groceries for over a month. Can you see me smiling from here?

I own 6 bond funds (words that I never ever expected to hear coming out of my mouth) but all in an Roth IRA to avoid paying taxes on the income generated by them. All have greater than 4% yields, 5 of them twice as much. (FWIW: IOFIX, BIT, PCI, PDI, PFN, PTY). I am not suggesting that you buy any of them, especially the CEF's.
For your "taxable" account might you not fair better by looking at a muni bond fund or something like a dividend growth fund (e.g. VDIGX, but there are many others) where the income might be at least partly qualified and thus possibly sheltered from the tax man? I'm guessing that you 'need' the income in your taxable side and prefer not to draw down your IRA account(s).

i own 12 balanced funds they are dodbx, hblix, jabax, jpvtx, lkbax, mbeax, msfrx, trxix, wbalx, ittax, mapox, vgwlx. in 2008 when the S&P dropped around 37%, my portfolio of balanced funds dropped around 22.8% which hurt. but it was better than an all stock fund portfolio. my thinking is that its impossible to time the market so you have to stay in it all the time but you should lower your risk by owning both stocks and bonds. im 56% stocks, 39% bonds, 4% cash according to fidelity.

Above all, having reached 65, I want to simplify, consolidate, simplify, re-deploy tax-sheltered stuff a bit at a time into non-sheltered investments and simplify, simplify, simplify. And keep it SIMPLE. Just in the last couple of days on this message board, I've read responses to my own questions and other links and articles which make me want to rip my own face off my head. NOTHING should be so complicated as the tax laws we have.
...So: I want to create a TAXABLE account in a good bond fund which pays more than the likes of PRSNX and DODIX. (I own the former, but not the latter. It's in a T-IRA.) I'm pretty happy with my PTIAX, (taxable account) but I don't want to put all my eggs in one basket. I'd love to get over a 4% yield, and prefer monthlies, not quarterlies. I have a MONTHLY few bills. The bills won't wait for my QUARTERLY pay-outs.
DODBX is a (balanced) prospect. I already own PRWCX in T-IRA.
What about Tweedy Browne, do you think?
Our income will be low enough so that we don't need to worry much about uncle sam and the IRS. But income will be high enough to live a good life here in the 50th State, even though EVERYTHING is expensive. We could not do it if my two maiden aunts didn't leave us a buncha money. But the money grew so well also due to the fine advice and direction I received and learned about HERE. Thanks.
The ins-and-outs of the tax code are totally bizarre. BULLSHIT is a word that comes to mind. "I'll just take mine straight, please. No chaser, either."
Anyone want to recommend a few of each for me? Bonds and balanced or pure stock funds? Thanks.

Thanks @Catch22 - Apparently T Rowe is interpreting Michigan’s law more conservatively. However, one wonders than what the purpose of the Michigan W-4P opt-out form is if funds and their shareholders aren’t required to observe the mandatory withholding regulation. I’m not doubting your word. I’ve spoke to other funds’ personnel who also seem to interpret the law more loosely than Price does. Different cultures. Different legal professionals I assume.
Here’s form W-4P https://www.michigan.gov/documents/taxes/4924_365368_7.pdf
Here’s a clarification of Michigan's law. Note that it specifically notes that IRAs are treated the same as “pensions” within the purview of the law. What are retirement and pension benefits? - https://www.michigan.gov/taxes/0,4676,7-238-43513-397990--,00.html

https://www.kiplinger.com/article/investing/T052-C003-S002-taxable-munis-they-re-worth-a-look.html
Taxable Munis? They're Worth a Look
Kiplinger's Personal Finance
But before we lock the door on those dark days, I offer a shout-out to one of the meltdown's few rewarding legacies: the taxable municipal bond

https://www.google.com/amp/s/finance.yahoo.com/amphtml/news/flight-quality-171827578.html
Flight to quality
From smart asset
-SImply put, flight to quality moves some of your investment capital from riskier investments.-

@Gary1952 What browser are you using?

https://www.kiplinger.com/article/investing/T041-C009-S002-vanguard-high-yield-tax-exempt-don-t-call-it-junk.html
Vanguard high yield tax exempt don-t call it junk
'Names can be deceiving. French fries aren’t really French, and Vanguard High-Yield Tax-Exempt fund (symbol VWAHX) isn’t a high-yield bond mutual fund. In the bond investing world, the words high yield are interchangeable with junk—meaning bond issues rated below investment grade that pay high yields and come with an elevated risk of default. Vanguard High-Yield’s peer group, however, is muni bond funds with long maturities. Though the fund’s 15% stake in junk-rated or unrated muni debt is higher than the category average of roughly 4.5%, the typical fund in the actual high-yield muni category has 10 times that much—45%—in junk and unrated bonds.'

@Crash, Could the current custodian of that 403(b) perform the initial rollover to an IRA? Whatever it’s now invested in would remain the same for that purpose. Once you’ve moved that money into a traditional IRA you should be able to perform IRA transfers to whatever custodian(s) you want. The IRAs can later easily be converted to Roths all together or in chunks.
That’s what I did with my 403(b) - which was already with TRP. Price was most helpful in facilitating that rollover. The funds I was invested in stayed the same. No money moved. Just a bit of paperwork. Later, I diversified away from Price into some other houses by doing simple IRA Transfers. Paperwork for an IRA transfer takes less than 15 minutes. Pretty basic. Just mail it in.
Changing from a 403(b) designation to IRA status would seem the important first step. Later, deciding which portions of the IRA to convert to Roths and how to time those conversions requires more foresight and planning on your part. The whole chunk doesn’t have to be converted at once. I found it simplest and most convenient to convert 100% of my holdings at different houses in 3 different years. It also allows you to pick the most opportune investments to convert at different times.
PS - In a 403 plan the employer controls it. In an IRA you have control. Big difference.
Just some ideas FWIW

Also affected: Gabelli ESG Fund, Inc.
The above verbiage applies to the Gabelli ESG Fund, Inc.
https://www.sec.gov/Archives/edgar/data/1391839/000119312519325039/d854762d497.htm

Thanks, everyone. Wife will not have worked at all for pay between Oct 11th and December 31st, 2019. I'm not working at all, taking SS and pension. I'm 65, she's 46. My reference to "not making enough money from which to deduct contributions into Trad. IRA" is a throwback to my own situation a couple/few years ago. We file jointly. There have been 3 years, lately, when my Trad-IRA contributions were non-deductible. (So, I've stopped putting any money into it.) Not because we maxed-out to the IRS-declared legal deductible limit and went beyond it, but because there was not enough income to be TAXED. And late in 2019, we moved from Massachusetts to Hawaii.)
(My tax guy explained the procedure and percentages and steps and nonsense and crapola and bullshit re: exactly what kind of mathematical formula the IRS uses to let me get at that $7,000 total in non-deductible (and zero tax owed) contributions. Clearly, some Martian with 8 brain cells and both male and female genitalia and no experience at all on planet Earth came up with that idiotic gobbledigook.... Now that I'm of age, I COULD take out the non-taxable amount without penalty. But it can't be done simply by taking the $7,000.00, since that's the non-taxable total amount in the account. The IRS requires that it be done over time, in order to preserve the tax-free status of that full amount. M-I-C... K-E-Y....... M-O-U-S-E.)
So, I'm hearing great things from you all about the Roth.
Is it not possible to convert the 403b DIRECTLY and TOTALLY into a Roth? Maybe that IS possible, but for some arcane reason, should not be done? Because the conversion (of whatever amount) triggers a taxable event?
Note: together, we will be WAY below the 12% tax bracket's income limit. PLENTY of room, there. BUT: maybe converting the 403b entirely in a single year might be the difference between owing no tax at all, and owing SOME tax.
I'm re-reading my entry, here. I'm going to just finish here. I'm only going to add this, which is the same thing I've volunteered to say to some customer rage and aggravation agents (aka "customer service") on the phone, just today, in fact: NOTHING should be THIS complicated. :)

@John - why would you stop the Roth and start a SEP-IRA?

...small business owner, tax reasons...save much more in tax long term since we contribute upward of 60s K [both of us] ...
You can have 401k /sepIRA /pensions at same time as long as we don't contribute more than certain amount per yr
About 15s year til retirement probably best route to go w sep IRA in our situations

Still not clear. Having self-employed income explains why one would start a small business retirement plan such as as SEP. But it doesn't explain why one wouldn't continue funding a Roth IRA.
The only requirements for contributing to a Roth are that you have compensation and that your MAGI does not exceed certain values. A SEP reduces your MAGI (see #5 in this Kiplinger piece). So if you met the MAGI requirement before starting the SEP, you should be able to meet the MAGI requirement now; the SEP just makes it easier.
The other requirement is that you have compensation. The SEP limits your contributions to 25% of your business' profits (that's 20% after counting the SEP contribution as a profit-reducing expense). So you've still got 80% of the business profits as income. That income could be used to contribute to the Roth.
Hence the confusion. Why stop contributing to a Roth IRA?

I am taking a close look at increasing my SEMMX position in my taxable account. I only have a small foothold position of SEMMX in my taxable account, primarily because it is not a tax efficient bond oef. I have held a relatively large position of SEMMX in my IRA account, where tax efficiency is not important. SEMMX is such a smooth performing fund, with no significant dips in its performance history, produces a TR of 4 to 5% pretty consistently. I am thinking that if I keep the position relatively small, the taxable consequences will not be significant. Some posters will consider SEMMX/SEMPX risky because of the low credit rating of its portfolio, but it seems the portfolio managers have done an excellent job, of managing this risk, with its arsenal of investing strategies allowed in a nontraditional bond oef. It has a Standard Deviation below 1, so it resembles smooth performance of funds like DBLSX, but with better total return.

https://www.sec.gov/Archives/edgar/data/909504/000119312519324974/d857920d497.htm
The Gabelli International Small Cap Fund
The Gabelli Global Rising Income and Dividend Fund
Gabelli Global Mini MitesTM Fund
(each a “Fund,” and collectively, the “Funds”)
Supplement dated December 27, 2019 to each Fund’s Statutory Prospectus dated April 30, 2019 and Statement of Additional Information dated April 30, 2019
This supplement amends certain information in the Prospectus (the “Prospectus”) and Statement of Additional Information (the “SAI”), each dated April 30, 2019, of the Funds. Unless otherwise indicated, all other information included in the Prospectus and SAI, or any previous supplements thereto, that is not inconsistent with the information set forth in this supplement, remains unchanged. Capitalized terms not otherwise defined in this supplement have the same meaning as in the Prospectus or SAI, as applicable.
Closing of Class AAA, Class A and Class C Shares; Reduction in Class I Minimum Investment Amount
The Board of Directors (the “Board”) of GAMCO Global Series Funds, Inc. (the “Corporation”), on behalf of each Fund, has approved the closing of each Fund’s Class AAA, Class A and Class C shares to new investors.
Effective January 27, 2020, (the “Effective Date”) each Fund’s respective Class AAA, Class A and Class C shares will be “closed to purchases from new investors.” “Closed to purchases from new investors” means: (i) with respect to Class AAA and Class A shares, no new investors may purchase shares of such classes, but existing shareholders may continue to purchase additional shares of such classes after the Effective Date, and (ii) with respect to Class C shares, neither new investors nor existing shareholders may purchase any additional shares of such class after the Effective Date. These changes will have no effect on existing shareholders’ ability to redeem shares of the Funds as described in each Fund’s Prospectus.
Additionally, on the Effective Date Class I shares of each Fund are available to investors with a minimum initial investment amount of $1,000 and purchasing shares directly through the Distributor, or investors purchasing Class I shares through brokers or financial intermediaries that have entered into selling agreements with the Distributor specifically with respect to Class I shares.
Since the minimum initial investment amount for each Fund’s Class I shares purchased directly through the Distributor is the same as that for all other classes of each Fund’s shares, shareholders still eligible to purchase Class AAA and Class A shares of each Fund on or after the Effective Date should instead consider purchasing Class I shares since Class I shares carry no sales load and no ongoing distribution fees. Investors and shareholders who wish to purchase shares of a Fund through a broker or financial intermediary should consult their broker or financial intermediary with respect to the purchase of shares of a Fund.
The Funds’ existing policies regarding conversions of Class AAA, Class A and Class C shares, as described in the Prospectus, will remain in place. Shareholders owning Class AAA or Class A shares of a Fund should consider converting their holdings to Class I shares of the Fund given the change in eligibility requirements for investing in Class I shares. Shareholders owning Class C shares of a Fund should also consider converting their holdings to Class I shares if they otherwise meet the eligibility requirements described in the Prospectus to convert their Class C shares of a Fund to a different share class. Conversions of Class C shares of a Fund to Class A shares of a Fund will no longer be permitted; rather, Class C shares of a Fund that would otherwise be converted to Class A shares of a Fund pursuant to the policies described in the Prospectus will instead be converted to Class I shares. Shareholders who hold shares of a Fund through a broker or financial intermediary should contact their broker or financial intermediary regarding any conversion of shares.
Following the Effective Date, the exchange privilege described in the Prospectus under “Exchange of Shares” will remain in place and subject to the policies described therein. The principal effects of this will be:
● Shareholders owning Class I shares of a Fund will only be able to exchange their shares for Class I shares of another fund managed by the Adviser or its affiliates if they meet the minimum investment requirements for Class I shares of that other fund;
●Exchanges for Class AAA or Class A shares of a Fund will only be permitted for existing holders of Class AAA or Class A shares, as applicable, of the Fund into which such shareholder seeks to exchange; and
●Class C shares of the Funds will no longer be available as an exchange option for holders of Class C shares of other funds managed by the Adviser or its affiliates.
Reinvestment of dividend and capital gain distributions will continue to be permitted for holders of the Funds’ Class AAA, Class A and Class C Shares.
SHAREHOLDERS SHOULD RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
2

@_mark hi sir...small business owner, tax reasons...save much more in tax long term since we contribute upward of 60s K [both of us] annually...we were looking at defined benefits bit it was not worth or unless you and woife contribute >200 300k per year
..we talked w our advisor and several persons who known each uchnabout tax before starting
You can have 401k /sepIRA /pensions at same time as long as we don't contribute more than certain amount per yr
About 15s year til retirement probably best route to go w sep IRA in our situations

Understanding the 5 year rule regarding Roth IRAs:
https://irahelp.com/slottreport/5-year-forever-clock

@_Gary1952
Hi sir..don't put all your eggs in one basket
Spread them out real estate bonds reits, corp Bond s, mini bonds ( (hospitals schools infrastructure airport etc) make sure have good ratings before buying
Easier said than done
.Or just spread your monies between /buying Fbnd HYG MUB MUNI if too lazy to watch your monies or have no time

I'm not clear on the income/tax situation: "If she doesn't make enough money from which to deduct IRA contributions."
So let's start with the mechanics. First, as @Gary1952 said, don't take a taxable distribution. If you're going to pay taxes, you're better off rolling it into a Roth. All its future earnings will be tax free, as opposed to taxable in a taxable account.
The law allows rollover conversions directly from a 403(b) into a Roth IRA. This eliminates one step in the conversion process. But my limited experience in helping someone do this within TIAA suggests that the 403(b) administrators may not know what they're doing. (In that case, TIAA withheld state income taxes which they were not supposed to do.)
Instead, a direct rollover to a T-IRA will preserve your options to convert or not. If you should convert the IRA (or a portion) to a Roth, don't have taxes withheld, else the amount withheld will be treated as a taxable withdrawal. In addition, the conversion moneycannot be withdrawn penalty free for five years. Because your wife is (and will continue to be) under 59½ the conversion money will be subject to the usual 10% early withdrawal tax until it becomes a qualified distribution. That happens five years after the conversion.
Here's a short column discussing these two "traps":
https://www.irahelp.com/slottreport/roth-ira-conversion-10-penalty-trap
In some states (I don't remember which state you're in), some retirement distributions (including IRA withdrawals/conversions, pension plans, etc.) can be taken state-tax-free. This feature may be age-restricted. For example, Colorado exempts $20K of retirement income (including IRA withdrawals) for people aged 55-64, and $24K for seniors. So if you're thinking about converting the money, it might make more sense for you to convert part of your T-IRA (if any) rather than part of your wife's. Not to mention that you're closer to RMDs.
Page with table of how each state treats retirement income:
https://taxna.wolterskluwer.com/whole-ball-of-tax-2018/state-retirement-taxes
That gets us to whether it even makes sense to convert (which is effectively what you're doing if you do a direct rollover to a Roth). Not enough information to reasonably comment here, especially since I don't understand what you mean by "doesn't make enough money". Generally 100% of compensation can be contributed to T-IRAs (up to contribution limits, of course).
The 12% bracket that @bee mentioned calls to mind another consideration: 0% capital gains. If you keep your total taxable income under $78,750 (sic), then you cap gains are taxed at 0% by the IRS. Note that this limit is slightly different from the $78, 950 limit for the 12% ordinary income tax bracket (MFJ).
Too many considerations and too little information to comment intelligently about your conversion decision (which would be informational in any case and not constitute advice, as with all of this post).