City Beverages Enrollment - Web Book - Ready - Flipbook - Page 6
ACCESS TO YOUR MONEY
Can I take money out of my account?
The federal government established qualified retirement plans to help you
prepare for retirement. For that reason, there are certain restrictions
regarding withdrawals and distributions. Remember to consider the tax and
long-term savings implications of taking money out of your account,
especially those prior to age 59 ½.
You may be able to withdraw money in these events:
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•
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Immediately after your employment terminates
Normal Retirement
Hardship - subject to the IRS Safe Harbor Guidelines
In-service – after reaching age 59 ½,
PLAN HIGHLIGHTS
• Death - paid to your designated beneficiary(ies)
Generally, distributions must begin after you reach age 73 if you have
terminated employment.
Can I borrow money from my account?
Under certain circumstances, you may borrow from your account. The loan
is usually limited to a maximum of 50% of your vested account balance, up
to a maximum of $50,000.00. Although you are borrowing from and
repaying yourself with interest, consider the long-term impact of borrowing
against your future.
• The minimum loan amount is $1,000.
• The maximum number of loans outstanding at one time is 1 (one).
• Loans for less than $2,000 shall be repaid within three (3) years.
• All other loans must be repaid within five (5) years.
• Loans specifically taken to help with the purchase of a principal residence
can be repaid within fifteen (15) years.
What if I leave my Employer?
You generally have several options:
You can roll over your balance into an IRA or a new employer Plan, if allowed,
and keep the money tax deferred.
If your vested balance exceeds $5,000, you can leave your money in the Plan
tax deferred.
You may receive the vested balance in cash. You will be responsible
for paying taxes and other penalties that may apply. Note that 20% of
your taxable distribution will be withheld for income tax purposes.
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