Accessing your money before retirement
Money can be withdrawn from your 457(b) plan in these events:
- Attaining age 59½ (employee contributions must be 100% vested)
- Retirement or separation from service.
- Your death or total disability
- Unforeseeable emergencies (subject to Plan Administrator approval)
In addition, you must begin taking distributions once you reach age 72 (age 70½ if born before July 1, 1949) or you retire, whichever is later.
Bear in mind that income taxes are payable upon withdrawal.
AIG Retirement Services offers many distribution options, allowing you to tailor your benefits to meet your individual needs. Depending on your employer’s plan provisions, your withdrawal options include:
- Transferring or rolling over your vested account balance to another tax-advantaged plan that accepts rollovers
- Receiving systematic withdrawals
- Taking a lump-sum distribution
- Choosing one of the many annuity options available from AIGRS
- Deferring distributions until a later date (but no later than attainment of age 72, age 70½ if born before July 1, 1949) if you are no longer working for the employer sponsoring the plan, allowing your account to continue to grow tax deferred.
Generally, income taxes must be paid on all amounts you withdraw from your plan.
Loans are available for "active" employees. Tax-free loans make it possible for you to access your account, subject to certain limitations, without permanently reducing your account balance. Defaulted loan amounts (not repaid on time) will be taxed as ordinary income and may be subject to a 10% federal tax penalty if you are under age 59½.