What are my options when I retire or separate from service from my employer’s 403(b) Plan or 457(b) Plan?

When you have retired or separated from service, you have the following options available to you: 

• You may elect to take monthly payments and report the sums received each year as ordinary income. One advantage of this method is that overall taxation may be in a lower tax bracket.
• You may leave the balance on deposit with us until the year you reach age 73. At that time, you will need to begin receiving the Required Minimum Distribution (RMD) as an annual payout. no RMD is required from Roth accounts. 
  • Note: You have as late as April 1 of the year following the year you turn 73 to take your first RMD. If you delay your first distribution to the following April, you will need to take two distributions in that year. For each subsequent year you must take your RMD by December 31. 
• You may withdraw any portion of these funds at any time. The taxable portion will be considered taxable income in the tax year of the withdrawal. Generally, we are required to withhold 20% from your distribution for federal income tax. State tax withholding may also be withheld where applicable. You may be subject to a 10% federal tax penalty if any money is withdrawn from 403(b) Plans before age 59 ½, unless an exception applies.
• You may choose to make a “direct rollover” to a Traditional IRA or an eligible employer plan.