Investing withdrawl funds from 457 b plan

[Nkm171964]

I am 60 years of age and I like to withdraw some funds in an installment. I have two questions:

1- Is such withdrawal under 20 K exempt from NY state and local taxes?

2- Can I use or invest these funds as I wish anywhere around the world like in foreign country stocks or funds OR are there any restrictions where I can spend or invest?

[AmyC]

1. Probably but better to check. You are over 59 1/2 so it is a reasonable assumption but there are always little catches.  Pages 13 and 14 of Pub 36 have all the limitations between periodic payments, lump sum, and other details. 

2. Yes, once you have the money, you can do whatever you want with it.

[Nkm171964]

Thank you for clarification. One more question-

NY state publication does not talk about my employment status. Do I have to be retired to get this 20K exemption from NY tax or I can still be employed and take in-service withdrawal to enjoy NY state tax exemption mentioned. 

[DavidD66]

You are entitled to the $20,000 exemption regardless of your income and whether or not you are working and have earned income.  There are no income restrictions nor is there a "retirement' requirement.  For additional information see: Publication 36 General Information for Senior Citizens and Retired Persons