A 457 plan offers special tax benefits to encourage employees of government agencies and certain non-profits to save for retirement. If you meet the criteria for taking a distribution from your 457 plan, you simply fill out a distribution request form from the financial institution that manages your 457 plan. You're eligible for a distribution after you've left the organization you were working for or, if you work for a government organization, for an unforeseen financial emergency. If, however, you work for a non-profit, your 457 plan can't permit distributions for financial emergencies.
Unforeseen Financial Emergencies
Unforeseen financial emergencies must be either a serious hardship that results from illness or injury for you, your spouse or your dependent; damage or destruction of your property; or a similar extraordinary and unforeseeable financial emergency. Examples include impending foreclosure of your main home, medical expenses for yourself, your spouse or your kids, or funeral expenses.
You are permitted to withdraw money from your 457 plan without any penalties from the Internal Revenue Service no matter how old you are. However, you will have to pay income taxes on the distributions. For example, if you're 45 when you leave the organization and you take out $10,000, you owe income taxes, but no early withdrawal penalty, on that amount.
- Photo Credit Sneksy/iStock/Getty Images
Rules That Apply to Deferred Compensation Withdrawals
Deferred compensation plans (457 and 409A plans) are established through the Internal Revenue Service (IRS) as public retirement savings accounts that mirror...
IRS Rules for a 457 Rollover to a Roth IRA
IRS Rules for a 457 Rollover to a Roth IRA. ... There are 457 plans that can be rolled over and those...
What Is a 457 Retirement Plan?
A 457 retirement plan is an employer-sponsored retirement plan, similar to a 401(k), ... so when they begin to receive withdrawals, ...
How to Cash Out a 457b Plan
What Is a Hardship Withdrawal? How to Invest in a 457(b) or a 403(b) Print this article; Things You'll Need. 457b plan...
Penalty for Early Withdrawal From a Retirement Account
How to Withdraw Funds From a 457 Plan. The holder of a Section 457 retirement account may withdraw existing funds at any...
Roth IRA Vs. 457
Roth IRA Vs. 457. There are several ... Withdrawals of gains or income from a Roth IRA before age 59 1/2 are...
How to Handle 457 Funds After Retirement
If you work for a governmental agency, chances are good that you will have access to a 457 plan. The 457 plan...
How to Get Money From My Retirement Plan
Why Do I Need to Get My Employer's Permission to Withdraw My 457 Deferred Compensation? ... one way that you could take...
Deferred Compensation Tax Rules
Rules That Apply to Deferred Compensation Withdrawals. Deferred compensation plans (457 and 409A plans) are established through the Internal Revenue Service ...