§457(b) Non-Governmental Plan Distributions
In order to receive benefits as a §457 plan participant, you must either:
- separate from service —Within 30 to 60 days after retirement, you must specify how and when distributions will be made.
You cannot change the method of distribution once those distributions have begun.
- attain age 70½
- incur an unforeseeable emergency
Distributions from §457 accounts are never subject to any premature penalties, regardless of the account holder's age.
Distributions must begin by age 70½ or retirement, whichever occurs later. The first minimum distribution must be taken by April 1st of the year following the year containing this triggering event.
The rules for §457 plan in-service distributions due to unforeseeable emergencies are much stricter than those for other plans.
Unforeseeable emergencies may include:
- imminent foreclosure of, or eviction from, a primary residence
- medical expenses
- funeral expenses for a family member
- financial hardship
However, a distribution may not be made if relief is available through insurance, reasonable liquidation of other assets or cessation of deferrals to the plan. Talk to your Legend Advisor for details.
Ordinary income taxes will apply to all §457 account distributions.
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