When can money be withdrawn from my plan account?
Money can be withdrawn from the plan in these events:
|•||Severance from employment.|
|•||Unforeseeable emergency as determined by Kansas City, Kansas Public Schools under the Internal Revenue Code.|
|•||Attainment of age 70½. (If you reach age 70½ and have not separated from service, you can elect to defer receipt no later than April 1 of the year following separation from service.)|
|•||A one-time withdrawal is allowed if your account balance is $5,000 or less and there have been no deferrals for the past two years and no prior withdrawals of this type have been taken.|
Income taxes are payable upon withdrawal and a 10% tax penalty may apply to early withdrawals of rollovers received from other types of plans or IRAs.
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 a 10% tax penalty may apply to early withdrawals of rollovers received from other types of plans or IRAs .
Other requirements and limits must be met prior to borrowing money from your account. For additional information regarding loans, please see your financial advisor.