403b distribution age 55 Separated from Service | Ed Slott and Company, LLC

403b distribution age 55 Separated from Service

Hello. Have a client who is a retired teacher, 55 years old, and wants to take a distribution from her 403b. Is the distribution subject to the 10% early withdraw penalty? Thanks.

Not if she retired in the year she reached 55 or later. However, if she retired before that year she must wait until 59.5 to avoid the penalty. She might also establish a 72t plan, but these plans are rigid and should only be established as a last resort.

 

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