Individuals above the age of 59 1/2 can choose to withdraw from their 403(b) account through the insurance or investment company in the distribution rate of their choice, such as monthly, quarterly or even in a lump-sum, according to WEA Member Benefits. Certain individuals may face penalties when they withdraw.
The 403(b) retirement plan is designed for employees of public schools and organizations that are tax-exempt as well as ministers, as stated by Investopedia. However, distribution rules for this plan are similar to other plans, such as the rule that states that most individuals face a 10 percent tax penalty for withdrawing before the age of 59 1/2, and withdrawals are mandatory once the individual turns 70 1/2.
Certain triggering events that require an individual to seek additional funds or force him to withdraw from his 403(b) plan early may allow him to withdraw penalty-free, as claimed by Investopedia. This happens if he becomes disabled, if he dies, an event that would allow the beneficiary to begin receiving distributions, if he disassociates himself from the retirement plan service, or if the plan is terminated. Unlike other retirement plans, the employee cannot withdraw from his plan early due to financial hardship or because he terminated his employment willfully.