Accessing your 403(b)
403(b) Distribution Eligibility
If you withdraw assets prior to age 59½, the IRS will impose a 10 percent penalty on the amount to be included in your taxable income, in addition to normal income taxes, unless you meet one of the following exceptions:
- Separation from service during or after the year you reach age 55
- Retire before age 55 and arrange a schedule of Substantially Equal Periodic Payments (SEPP)
- Separate from service and execute a rollover to a tax-deferred account such as another employers plan or a Rollover IRA
What happens to your 403(b) if you leave your employer?
- Assets may be transferred to your new employer’s plan if permitted by that plan.
- Assets may be moved to a rollover IRA at an institution of your choice.
- You may leave the money in your current plan and continue to enjoy tax-deferred growth (subject to plan rules).
- You can take a lump sum distribution, but early withdrawal penalties and tax consequences may apply. Please consult your tax adviser for more information.
Taking a Loan from Your 403(b)
Subject to availability and plan rules, IRS limits loans to the lesser of:
- $50,000 or
- One half of account value