Q:

Can you withdraw from a 457 (b) plan?

A:

Quick Answer

Withdrawals can be made early from a 457(b) plan before being paid out in full in retirement under a few certain conditions, according to CNN Money. However, taxes are owed on any withdrawals.

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Full Answer

Several circumstances allow a withdrawal of money from a 457(b) plan, reports Mark Kennan for The Nest. While plans differ from policy to policy, being let go from a job allows a person to make withdrawals from his 457(b). Some 457(b) plans allow account holders to withdraw under circumstances of financial hardship. Each plan defines these hardships individually, but it typically requires the financial hardship to be unforeseen. Workers still employed at the age of 70 1/2 must start withdrawing from their 457(b) plans, so plan to withdraw a minimum distribution from the account in that same year. If an account holder passes away, the money in his 457(b) plan can be withdrawn by a predetermined beneficiary immediately without penalty, notes The Nest.

A 457(b) plan differs from other retirement plans in that withdrawals can be made before age 59 1/2 without having to pay the 10 percent early withdrawal penalty, says The Nest. The government taxes any money withdrawn from a 457(b) plan like any other form of income.

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