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Early Withdrawal From 457

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I have a public sector 457..with about 25,000 in it...what are the penalties for withdrawing some money from my 457..I'm 52...

 

Thanks..

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Are you still with your employer? If not there is no age 59 1/2 early withdrawal penalty.

 

from http://www.457bwise.com/faqs/index.html

 

Governmental 457(b) plan advantage: no early withdrawal penalty at retirement or upon termination of employment.

A big advantage to the 457(b) plan is that it is not subject to the age 59 1/2 withdrawal rule. This means there is no 10% penalty for early withdrawal at retirement or upon termination of employment. [Note: This benefit applies only to public (governmental) plans. Private plan participants generally will pay federal income taxes when funds are made available to them. They may, however, defer receiving funds and instead be taxed when they actually take distribution].

 

Dan Otter

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I'm 52 and still employed and will be for a number of years...

 

 

 

 

 

Are you still with your employer? If not there is no age 59 1/2 early withdrawal penalty.

 

from http://www.457bwise.com/faqs/index.html

 

Governmental 457(b) plan advantage: no early withdrawal penalty at retirement or upon termination of employment.

A big advantage to the 457(b) plan is that it is not subject to the age 59 1/2 withdrawal rule. This means there is no 10% penalty for early withdrawal at retirement or upon termination of employment. [Note: This benefit applies only to public (governmental) plans. Private plan participants generally will pay federal income taxes when funds are made available to them. They may, however, defer receiving funds and instead be taxed when they actually take distribution].

 

Dan Otter

 

 

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Ask a benefits official if you can see the Plan Document. This will spell out the exact rules of your plan. Unless you can prove hardship (see below), it may be difficult to access this money.

 

Dan Otter

 

457(b) plans may, but are not required to, permit distributions to participants or beneficiaries who are faced with unforeseeable emergencies.

The plan must define "unforeseeable emergency" as a severe financial hardship resulting from:

• an illness or accident of the individual, the individual's spouse, or the individual's dependent,

• loss of the individual's property due to a casualty, or

• similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the individual.

 

Examples of unforeseeable emergencies might include:

• imminent foreclosure of, or eviction from, the individual's primary residence,

• the need to pay for medical expenses or ###### medicines, or

• funeral expenses for a spouse or dependent.

 

Please note that home purchases and tuition payments are not considered unforeseeable emergencies.

 

Whether an individual is faced with an eligible unforeseeable emergency is determined based on the relevant facts and circumstances of each case. Even if an unforeseeable emergency exists, the distribution cannot be made if the emergency can be relieved:

• through reimbursement or compensation from insurance or otherwise,

• by liquidation of the individual's assets, to the extent that such liquidation would not in itself cause a severe financial hardship, or by cessation of deferrals to the plan.

 

Your employer must approve any distribution.

 

 

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