Page 8 - 000 Complete EBook - 403(b) & 457(b) Test 12202017 1

It is important to note that these qualified retirement plans are designed for long-term
accumulation. Participants may only withdrawal funds from accounts except in certain
specified circumstances: separation from service from employer, age 59 1/2, retirement, death,
financial hardship
disability or (if allowed by the Plan). Withdrawals made after age 59 1/2,
or the calendar year the participant attains age 55 and separates from service, are allowed
and subject to the normal income tax on the amount withdrawn each year. Withdrawals
prior to age 55, after separating from service, will receive an additional 10% early
distribution penalty tax in addition to normal income tax. Participants may defer taking
withdrawals from their account until age 70 1/2. At that time, participants must begin
withdrawing at least the minimum amount based on standard life expectancy tables, which
is called a Required Minimum Distribution.

Your plan may, but is not required to, also allow for Roth 403(b) accounts, which are made
after taxes have been withheld. A designated Roth account is a separate account in a
403(b) Plan that holds designated Roth contributions. If your plan includes a designated
Roth feature, participants can designate some or all of their elective deferrals as designated
Roth contributions (which are included in gross income), rather than traditional, pre-tax
elective contributions. You can contribute to both a designated Roth account and a
traditional, pre-tax account in the same year, as long as the total combined contributions
do not exceed the maximum contribution limits for 2018. Eligible distributions from a
Roth account (including earnings) are generally tax-free. Roth 403(b) accounts are subject
to the same 403(b) rules and penalties as discussed above.

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