Money may be withdrawn from the plan in these events:
- Reaching age 59½
- Severance from employment
- Financial hardship (Hardship withdrawals may be made from salary reduction contributions only, not from earnings on those contributions).
- Reaching age 72 (age 70½ if born before July 1, 1949)
- Qualified birth or adoption withdrawal within one year from the date of birth or adoption (not subject to the 10% early withdrawal penalty).
Income taxes are payable upon withdrawal. Federal restrictions and a 10% federal early withdrawal tax penalty may apply if taken before age 59½. Be sure to talk with your tax advisor before withdrawing any money from your plan account.
Transfer or withdrawal restrictions on Fixed-Interest Option
A 20% annual withdrawal is allowed from the Fixed-Interest Option with no withdrawal charge. There are no transfer or withdrawal restrictions if one of the following conditions is met:
- Annuity payout option is selected
- Your death
- Total and permanent disability
- Withdrawal taken as a hardship under the terms of the employer plan
- Retirement or separation from service from the employer who sponsors your plan
- Elect to transfer a portion of the account value to a companion account for a loan
This restriction includes money transferred to mutual funds or to another provider.
Please note that other rules may apply to other fixed accounts in the plan.
The plan is intended to help you put aside money for your retirement. However, your 403(b) plan includes a feature that lets you borrow money from your account tax free without permanently reducing your account.
- The amount the plan can loan to you is limited by rules under the tax law. All loans will be limited to the lesser of: one-half of your vested account balance or $50,000.
- The minimum loan amount is $1,000.
- All loans must generally be repaid within five years. A longer term of 15 years may be available if the loan is to be used to purchase your principal residence.
- You pay interest back to your account. The interest rate on your loan will be the Prime Rate plus 1%.
- A $50 processing fee for all new loans and a $50 per year loan maintenance fee are charged to your account.
Other requirements and limits must be met prior to borrowing money from your account. For additional information regarding loans, please see your financial professional.