Your three distribution options
When you leave your job or retire, you may choose to leave your savings where they are.* Or you may decide your best choice is to begin taking distributions.
Keep in mind that any pretax contributions will be taxed when they are taken out unless you roll these funds directly into another retirement plan or a traditional IRA. Distributions from your plan may also have an impact on your income taxes.
Withdrawing money from your plan can cost you
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20% may be withheld from your distribution for federal income tax.
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You may have to pay additional state and local income tax.
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The money you withdraw could put you in a higher tax bracket, and you may owe more taxes.
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If you’re under the age of 59½, you could owe a 10% early distribution tax penalty in addition to income taxes. Please note that this penalty does not apply to 457 plan contributions.
The only time you must withdraw money from your account is when you reach the age for taking required minimum distributions (RMDs) – typically age 73** – and even then, you only have to withdraw a portion of your funds. Talk to a representative about your unique situation. We’d be happy to help.