403(b) Early Withdrawal Penalties
As mentioned, qualified distributions are tax-free. To count as a qualified distribution, you have to be at least 59.5 when withdrawing money from your account. In addition, your account has to have been open for a minimum of five years. If you don’t meet either of those conditions, a 10% early withdrawal penalty would apply to distributions.
You may qualify for an exception under certain circumstances. For instance, you could avoid the penalty on an early withdrawal if:
- You separate from service during, or after, the year you turned 55
- You separate from service before age 55 but take substantially equal payments for a minimum of five years or age 59.5, whichever is later
- You become totally and permanently disabled
Roth 403 (b)
