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IMPORTANT LOAN OR HARDSHIP DISTRIBUTION INFORMATION
  • Retirement Manager, a website to help you manage your 403(b) account, has been launched to help keep your retirement plan in compliance with recent federal tax law changes. Specifically, these changes impact what needs to be done in order to take a loan or hardship distribution from your 403(b) account. To comply with these new requirements, an eligibility certificate is required before your vendor will be able to process a distribution request.  If you need a loan or hardship distribution, visit the Retirement Manager website to obtain an eligibility certificate prior to completing your 403(b) vendor’s distribution paperwork. 

    Click here to access Retirement Manager.
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403(b) Withdrawals & loans

Accessing your money before retirement

Distributions
You may take distributions from your account in the following circumstances: 
  • Attaining age 59½
  • Separation from service
  • Retirement
  • Upon your death
  • Due to hardships
  • In a loan
Benefit options upon retirement or separation of service
When you retire, or if you terminate employment before retirement, you have the following basic benefit options from which to choose: continuation of tax-deferred accumulation, loan, annuitization, or cash distribution.

Continuation of tax-deferred accumulation
You can choose to leave your account on deposit so that it can continue to accumulate tax-deferred. This way you can maintain investment flexibility while deferring all current tax liability until withdrawal or annuity payments begin, usually at retirement. You will be required under federal law to begin minimum distributions by April 1 of the year following your retirement or age 70½, whichever is later.

Annuity payout
When you select an annuity option, you decide what portion, if not all, of your account you would like to use for annuity payout and how frequently you would like to receive payments. Generally, annuity payout can provide an income that the insurance company guarantees will last as long as you live. Partial annuity payout can provide an income and continued access to a portion of your retirement savings. With annuity payout, there are many payment options from which to choose.

Taxes are payable on annuity payments as they are received. All guarantees are backed by the claims-paying ability of the insurance company.

Cash distribution
You can receive all or any portion of your account's current value as a cash distribution or as systematic withdrawals. However, if you choose this option, the amount withdrawn is immediately subject to federal income taxes and may be subject to federal early withdrawal tax penalties.
Loans
You may take advantage of a tax-free loan from your VALIC 403(b) account. This provision gives you access to cash without permanently reducing the value of your HCPS 403(b) account. It is especially attractive since it's not subject to federal withdrawal restrictions imposed on plan distributions received prior to age 59½. However, defaulted loan amounts will be taxed as ordinary income and may incur a 10% federal tax penalty if you are under the age 59½. Your financial advisor can provide information regarding maximum loan amounts and loan repayment terms.

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