Can I Withdraw From 403(b) While Still Employed?
Yes, you may be able to withdraw money from a 403(b) while you are still employed, but only if your plan allows it and you meet certain requirements. Common ways to access a 403(b) while still working include reaching age 59½, qualifying for a hardship distribution, or taking a loan from the plan.
Table of Contents
When Can You Withdraw From a 403(b) While Still Employed?
Can I Withdraw From My 403(b) at Age 59½ While Still Working?
Can I Take a Hardship Withdrawal From My 403(b) While Still Employed?
What Qualifies as a Hardship Withdrawal From a 403(b)?
When Can You Withdraw From a 403(b) While Still Employed?
If you're still working for the employer sponsoring your 403(b), you generally can't simply withdraw money whenever you'd like. Unlike a bank or brokerage account, a 403(b) is designed specifically for retirement savings. Federal rules restrict when participants can access the money. While you're still employed, the most common options are an in-service withdrawal after reaching age 59½, a hardship distribution, or a 403(b) loan. Your plan's Summary Plan Description (SPD) or other plan documents should explain which types of withdrawals are available. The IRS specifically recommends reviewing your plan documents to determine when distributions, hardship withdrawals, or loans are permitted
Can I Withdraw From My 403(b) at Age 59½ While Still Working?
A 403(b) plan may allow you to take a distribution once you reach age 59½, even if you are still employed by the organization sponsoring the plan. The IRS identifies reaching age 59½ as one of the events under which a 403(b) plan may allow participants to take money from their accounts. This is sometimes referred to as an in-service distribution or in-service withdrawal because you are accessing the account without first separating from your employer. Federal law permitting the withdrawal does not necessarily mean your particular 403(b) must offer it. Your employer's plan document ultimately determines whether an age 59½ in-service withdrawal is available.
Can I Take a Hardship Withdrawal From My 403(b) While Still Employed?
Yes, you can take a hardship withdrawal from your 403(b) if your plan permits hardship distributions and you meet the plan's requirements.
That makes hardship withdrawals one of the primary ways someone under age 59½ may be able to withdraw money from a 403(b) without leaving their employer.
What Qualifies as a Hardship Withdrawal From a 403(b)?
Examples of what qualifies as a hardship withdrawal from a 403(b) include certain medical expenses, costs directly related to purchasing a principal residence, tuition, payments necessary to prevent eviction from a principal residence, payments necessary to prevent foreclosure on a principal residence, certain funeral or burial expenses, certain costs related to repairing damage to a principal residence, and certain expenses and losses connected with qualifying federally declared disasters.
