Hello all
i am a recent graduate and currently working as a hospitalist in pa.
my hospital offers a 403b and 457 b (non governmental) both of which offer the same investment options
im currently maxing out the 403b
the 457 im not so sure about
after my online research what i understand is that the drawback for 457 is hospital creditor risk and distribution might not be tax favorable. Main advantage seems to be being able to withdraw funds after leaving the current employer without 10% penalty
when i called the company who holds the accounts they said i can withdraw from 457 without the 10% penalty and taxes would apply based on my income.
however when asking 2 different company reps at the hospital, they are giving me vague answers as follows
"The 457 b Plan is not as flexible as a 403 b retirement plan. Therefore, the details regarding distributions/withdrawals of the plan will differ from those of other retirement plans.
The 403 b plan will allow you to make periodic withdrawals at any time once you have severed employment and the penalty that may apply will depend upon your age at the time of the withdrawal request.
10 % penalty may apply if you were to leave the employer prior to age 59 1/2. This is an IRS rule which will apply if under the age of 59 1/2 for the 403 b and the 457 b plan, as well as, several other retirement plans."
so im not sure what to do, the only reason i was going to put money in the 457 was so i could withdraw prior to 59.5 if i decide to retire early. So is there a 10% penalty or no?
i am a recent graduate and currently working as a hospitalist in pa.
my hospital offers a 403b and 457 b (non governmental) both of which offer the same investment options
im currently maxing out the 403b
the 457 im not so sure about
after my online research what i understand is that the drawback for 457 is hospital creditor risk and distribution might not be tax favorable. Main advantage seems to be being able to withdraw funds after leaving the current employer without 10% penalty
when i called the company who holds the accounts they said i can withdraw from 457 without the 10% penalty and taxes would apply based on my income.
however when asking 2 different company reps at the hospital, they are giving me vague answers as follows
"The 457 b Plan is not as flexible as a 403 b retirement plan. Therefore, the details regarding distributions/withdrawals of the plan will differ from those of other retirement plans.
The 403 b plan will allow you to make periodic withdrawals at any time once you have severed employment and the penalty that may apply will depend upon your age at the time of the withdrawal request.
10 % penalty may apply if you were to leave the employer prior to age 59 1/2. This is an IRS rule which will apply if under the age of 59 1/2 for the 403 b and the 457 b plan, as well as, several other retirement plans."
so im not sure what to do, the only reason i was going to put money in the 457 was so i could withdraw prior to 59.5 if i decide to retire early. So is there a 10% penalty or no?
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