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Retired, 56, & getting CalPers pension, in addition I have a 457b qualified plan & want to take withdrawals. Am I required to do SEPP? Or can I make random withdrawals?

Forum|Forum|7 years ago
June 3, 2019
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Best answer by dmertz

SEPP plans are used to avoid early-distribution penalties. To withdraw money from the 457(b) plan that is attributable to original 457(b) contributions and the earnings thereon there is no need to do a SEPP plan because distribution of this money is not subject to early-distribution penalty.

If rolled money over to a 457(b) plan from another type of plan, any of that money and earning thereon are required to have been kept in a separate sub-account and would have to be distributed under a SEPP plan to avoid early-distribution penalties before age 59? unless another exception applies.

Contact your 457(b) plan administrator for details and requirements relative to your particular plan.

D

dmertzAnswer

Employee

SEPP plans are used to avoid early-distribution penalties. To withdraw money from the 457(b) plan that is attributable to original 457(b) contributions and the earnings thereon there is no need to do a SEPP plan because distribution of this money is not subject to early-distribution penalty.

If rolled money over to a 457(b) plan from another type of plan, any of that money and earning thereon are required to have been kept in a separate sub-account and would have to be distributed under a SEPP plan to avoid early-distribution penalties before age 59? unless another exception applies.

Contact your 457(b) plan administrator for details and requirements relative to your particular plan.

M

mktabbertAuthor

Thank you VERY much dmertz. Excellent news, I was confusing SEPP with 457(b), whereas SEPP applies to IRAs, 401(k)'s, etc., the additional 10% tax penalty does not apply to 457(b), thankfully, even though I'm only 56. Also all funds I contributed are only attributable to 457(b), no rollovers from other plans. Thanks for the clarification dmertz!