Receiving Income in Retirement
As retirement approaches, it’s important to understand the options for receiving your money before you leave employment. Fortunately, the Plan offers several options, so you can select the option that’s best for you.
No one said you have to take your money when you retire. If you’re in a good financial position and can let your money stay and possibly grow, you can stay put! Your money can potentially continue to grow until you’re required to take a distribution at age 70½.
Of course, investing involves market risk, including possible loss of the money invested. Your Account Executive will help you understand how to deal with and adjust for market risk through retirement.
Getting paid in retirement
If you’re ready to start withdrawing your money, choose the option that’s right for you.
- Systematic withdrawal – This option allows your investments to stay active while you receive regular payments. You have two payment options:
- Receive a fixed amount at the frequency you select (monthly, quarterly, semi-annually, or annually) until your account balance reaches zero.
- Choose how long and how frequently (monthly, quarterly, semi-annually, or annually) you would like to be paid. Payment amounts will vary based on the performance of your investments and will continue until your account balance reaches zero. You can change your distribution option at any time.
You can continue to manage and change your investment options while receiving systematic withdrawals. Since market risk is involved, you may not be paid as much or as long as you originally expected, depending on the performance of your investments.
- Partial Lump Sum – With a partial lump sum withdrawal, you can receive part of your account balance as a lump sum, and leave the remainder in your account. If you are receiving a systematic withdrawal, you can also take a partial lump sum should you need extra money at a particular time.
- Lump Sum – With a lump sum withdrawal you receive the entire balance of your account, and the account is closed. Any pre-tax contributions and their earnings that are not rolled over into another qualifying plan within 60 days of receipt will be taxed as ordinary income, based on your tax bracket. This may push you into a higher tax bracket. Qualifying Roth 457 withdrawals may be taken income tax-free.
Things to remember
When you take a distribution, you may designate whether it is taken equally from all of your funds, or only from the Stable Income Fund (if applicable). Each distribution must be a minimum of $100.
Get the help you need
Contact the HELPLINE if you have questions about receiving your money in retirement. Neither the Plan nor its representatives may offer tax or legal advice. You should consult your own counsel before making any decisions about receiving income from the Plan.