403(b) Withdrawals & Loans
When can money be withdrawn from my plan account?
Money can be withdrawn from the plan in these events:
|•||Severance from employment.|
Income taxes are payable upon withdrawal and federal restrictions and a 10% tax penalty may apply to early withdrawals. Be sure to talk with your tax advisor before withdrawing any money from your plan account.
Can I withdraw money in case of financial hardship?
If you have an immediate financial need created by severe hardship and you lack other reasonably available resources to meet that need, you may be eligible to receive a hardship withdrawal from your voluntary contributions.
If you feel you are facing a financial hardship, you should see your financial advisor for more details.
Can I borrow money from my account?
The plan is intended to help you put aside money for your retirement. However, Kansas City, Kansas Public Schools has included a plan feature that enables you to access money from the plan.
|•||The amount the plan can loan to you is limited by rules under the tax law. All loans will be limited to the lesser of: one-half of your vested account balance or $50,000.
|•||Loans can be taken from your salary deferrals only.
|•||The minimum loan amount is $1,000.
|•||All loans must generally be repaid within five years. A longer term may be available if the loan is to be used to purchase your principal residence.
|•||You can have one loan outstanding at a time. |
|•||You pay interest back to your account. The interest rate on your loan will be the Prime Rate plus 1%. |
|•||A $50.00 processing fee for all new loans and a $30.00 per year maintenance fee are charged to your account. |
Defaulted loan amounts (not repaid on time) are taxed as ordinary income, and may be subject to a 10% federal tax penalty if you are under age 59½.
Other requirements and limits must be met prior to borrowing money from your account. For additional information regarding loans, please see your financial advisor.