For a 457(b) plan, you are eligible to withdraw your funds once you have reached age 59 ½ or terminated employment. A beneficiary is eligible to withdraw the funds upon the death of the participant.
The Internal Revenue Code and the Plan contain three provisions that allow withdrawal of funds while still employed. These three provisions are limited and have strict requirements, which must first be met. They are:
- An unforeseen emergency must be documented, meet the Internal Revenue Code definitions and criteria, and be approved by the Plan Administrators.
- A ‘de minimis’ withdrawal – this provision allows a withdrawal while employed if your balance is $5,000 or less, you have not deferred for the last 24 months, and have never used this provision before.
- Attainment of age 59 ½, but you must stop your deferrals. (This option is not available in plans of private, non-profit employers.)