Withdrawing money from 403(b) retirement plans involves contacting the plan administrator and filling out the necessary forms to secure the money. Some 403(b) plans allow loans and hardship distributions, while others do not, meaning that distributions may not occur without penalty until the employee turns 59 1/2, notes the IRS.Continue Reading
A 403(b) plan is similar to a 401(k) in that employees may deposit earnings pretax into a retirement savings account. The 403(b) is used by nonprofit entities, while the 401(k) is the same type of account, but used by for-profit entities, according to the IRS.
Employees may request an early distribution from a 403(b) account. However, if that takes place before the employee turns 59 1/2 or goes through a qualifying hardship, there is generally a 10 percent tax for early distribution. When the employee turns 59 1/2, the distributions are still taxed, because the original contributions went into the account pretax. Exceptions to this include funds from Roth IRAs, which go in after tax, or other contributions made after income tax was paid. The funds in a 403(b) are either distributed in one lump sum or in smaller amounts, depending on what the employee requests, as stated by the IRS.Learn more about Investing