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401K is for "for profit" businesses
403B if for "non-profit" businesses
If she can roll over 401K money into an IRA then I would do it. Many more options would be available to her.

I would call someone like Schwab or Vanguard and talk to them about it.

I worked for a non-profit out of college and had a 401k. I believe 403b's are for non-profits but anyone including non-profits can have a 403b.

I would definitely get money out of a 401k into an IRA asap if it doesn't cost you anything including taxes as you have more options and they are generally cheaper (lower fees).

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Will there be any penalties by rolling it into the IRA?

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As long as you roll a roth into a roth, I don't believe there are penalties but don't quote me on that.

Just remember, you want the money to not go to you but straight to your new account if at all possible. I've never done it, I just know what you don't want is a check to you that you cash, then write a new check into the new account. You want to deposit the money straight from the old account to the new account.

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Just remember, you want the money to not go to you but straight to your new account if at all possible. I've never done it, I just know what you don't want is a check to you that you cash, then write a new check into the new account. You want to deposit the money straight from the old account to the new account.

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anyone (schwab, vanguard, fidelity) will tell you EXACTLY what to do and how to do it. Your advice is spot on but why do the work when someone else will do it for you?

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I'm just repeating stories I've been told, and I had a couple of coworkers have a very tough time closing accounts with lower end 401k providers and trying to forward the money into a new provider. So I can see it happen. I had a guy in the next office over who probably spent 20 different phone calls dealing with one of them who basically tried to do everything they could to not have him close his account.

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yeah it happens. But schwab will do the work for you, or they did for me. I had to call fidelity twice, but schwab told me exactly what to do/say.

My account wasn't trivial amounts though.

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Would it be of any benefit to roll the money she has in her current 401K into a Roth IRA before they switch to the 403B?

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ROTH IRA will be the way to go 9/10 times. More options and likely lower fees. Had a couple clients today in the exact opposite situation.... worked for a non-profit hospital and had their department get purchased by a for-profit group. Some transitioned into IRAs, others into the employers new plan, and a few just stayed put.