Central Michigan University 457(b) Public Deferred Compensation Plan does not offer a loan feature.
Age based distribution
Your employer will typically allow you to withdraw funds once you've reached 70.50.
You can withdraw all or part of your account in a single cash payment, depending on your plan rules and the terms of your contracts.
- Your right to a lump-sum distribution from your TIAA Traditional Account may be restricted to taking periodic payments under the terms of the contract. Please refer to your contract or certificate for full details or contact us at 800-842-2252.
If your plan allows, you can choose to receive regular income payments (minimum $100) on a semimonthly, monthly, quarterly, semiannual or annual basis. You can increase, decrease or suspend the payments at any time.
- These withdrawals are not available from TIAA Traditional Account balances.
When you leave your employer, you may be eligible to withdraw your retirement savings. Your plan may distribute your entire balance if the value does not exceed $2,000. Even if your plan doesn't allow cash distributions, you can withdraw your entire retirement savings if your TIAA Traditional Account value does not exceed $2,000 and your overall account balance is below a limit set by your employer's plan (either $1,000 or $5,000).
Lifetime retirement income
- One-life annuity - provides income for as long as you live.
- Two-life annuity - provides lifetime income for you and an annuity partner (your spouse or someone else you name) for as long as either of you live.
- One- or two-life annuity with guaranteed period - guarantees income for up to 20 years, as long as the period you choose does not exceed your life expectancy. It ensures that income continues to go to your beneficiaries for the remainder of the guaranteed period if you (one-life annuity) or both you and your annuity partner (two-life annuity) die before the end of that period.
Single-sum death benefit
A set amount your beneficiary(ies) will receive from your retirement account if you die before taking income.
You can choose to receive income for a set period of two to 30 years, depending on the terms of our contract and your plan's rules (and not to exceed your life expectancy).
- Payments stop at the end of the period, during which you will have received all your principal and earnings.
You can receive the current interest earned on your TIAA Traditional Account in monthly payments. Your principal remains intact while you receive the interest.
- These payments generally are available to individuals between ages 55 and 71 and must begin at least one year prior to reaching age 72.
Retirement transition benefit
In order to more easily transition into retirement, you may be able to withdraw up to 10%, in cash, of your lifetime annuity income. The amount you withdraw will reduce your lifetime annuity income accordingly.
To withdraw money for an emergency with a 457(b) plan requires you to meet the rules for an Unforeseeable Emergency withdrawal. The IRS defines an unforeseeable emergency as a severe financial hardship to the participant or beneficiary resulting from, but not limited to:
- A sudden and unexpected illness or accident of the participant, a beneficiary, or the participant’s or beneficiary’s spouse or dependent.
- Loss of the participant’s or beneficiary’s property due to casualty.
- Imminent foreclosure or eviction from the participant’s or beneficiary’s primary residence
- Medical expenses, including non-refundable deductibles and the cost of prescription drug medication
- Funeral expenses of a spouse or dependent
- Other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant or beneficiary.
Please note that an unforeseeable emergency does not typically include the purchase of a home or payment of college tuition.
Generally, withdrawals are permitted if the hardship can’t be solved:
- Through reimbursement or compensation from insurance or otherwise;
- By liquidating or accessing personal assets including those associated with freely distributable amounts held in retirement and tax-sheltered savings plans (to the extent this would not itself cause a severe financial hardship); or
- By stopping deferrals under the plan.
DB service credits
Plan participants may consider purchasing service credits when they directly transfer from a Section 403(b) tax sheltered annuity or governmental 457(b) plan to a governmental defined benefit plan allows the purchase of "permissive service credits."
A permissive service credit is credit for a period of service recognized by a defined benefit governmental plan only if you voluntarily contribute to the plan an amount that does not exceed the amount necessary to fund the benefit attributable to the period of service and the amount contributed is in addition to the regular employee contribution, if any, under the plan.
A permissive service credit may also include service credit for up to 5 years where there is no performance of service, or service credited to provide an increased benefit for service credit which a participant is receiving under the plan.
When purchasing service credits, keep in mind:
- The request for purchasing service credits is most often accomplished via a direct transfer from either a qualified or non-qualified plan.
- For example, permissive service credit can be granted for time spent teaching outside of the United States without being considered non-qualified service credit.
- If an institution does not allow participants to purchase service credits, they must meet a triggering event at which point the transaction can be processed (Per Plan Rules). The request would need to be processed as a rollover and financial forms are required.
457(b) In-service, non-hardship employee withdrawals
Some companies will allow active employees participating in a qualified employer retirement plan to withdraw a portion of their plan’s account balance upon request, without demonstrating a specific financial need - it’s called an “in-service withdrawal” or an “in-service distribution.” In service means you are still working for the employer sponsoring the plan.
When considering an in-service withdrawal, keep in mind:
- You may be able to roll the money over to another IRA or qualified plan or annuity without tax penalty, if you do so within 60 days.
- The in-service rule usually only allows payment of the employee’s money, but if you are terminated, you may be eligible for some matching funds.
For plans with balances of $5,000 or less, the following must be true in order to make 457(b) In-service withdrawals:
- You must still be employed
- You must not have made contributions within the last 24 months
- You must not have made this type of withdrawal request before
Please note that 457(b) In-service withdrawals may not always be at the discretion of the employer or specific to this plan.
Prior to rolling over, consider your options. You may be able to leave money in your current plan or withdraw cash. Compare the differences in investment options, services, fees and expenses, withdrawal options, required minimum distributions, other plan features, and tax treatment.
If you have had an IRS-defined "triggering event," and your plan allows withdrawals, you can roll over your accumulations to another retirement plan that will accept them or to an Individual Retirement Account (IRA).
- Direct rollovers - from one account to another - are nontaxable and not reported as income to the federal government. Your plan's rules specify when you are eligible for a distribution.
Minimum distribution option
Generally, you must begin taking minimum withdrawals from your account by April 1 following the year in which you turn age 72 or retire, whichever is later.
If you're married, you may be required to get spousal consent to receive any distribution option other than a qualified joint and survivor annuity.
This plan is designed to provide you with income throughout your retirement. Leaving money in your account may allow the funds to grow on a tax-deferred basis.
This plan allows you to receive a cash withdrawal. This may be restricted by the terms of your TIAA contracts. Taxes and penalties may apply.