403(B)/ TSA Plans

Your options for handling the money you receive from your account include:

• Withdrawing the money from the account.
• You can only withdraw funds from your TSA account at limited times. If you are under age 59 1/2, you will have to pay regular income taxes and a 10% penalty on the amount of the withdrawal. Your employer will be required by law to withhold 20% of the amount distributed to assure the tax and penalty are paid.
• Transferring the funds to a new employer's plan.
• The money in your TSA can be transferred to another employer's plan. If your money is transferred directly from one plan to another, no tax or penalty will be payable and taxes will not be withheld.
• Transfer the money to an IRA rollover, or "conduit IRA."
• You can transfer the money from a TSA plan to a new IRA. All the money must go directly from one institution to another to avoid any tax or penalty. It is advisable to not add to or withdraw from this IRA account after transferring money from a TSA into it. You may lose the option of one day transferring the funds to another employer's plan.
• Take withdrawals from your account over the course of your life.
• This option allows you to withdraw from your account every year. The amount that you must withdraw is based on your life expectancy. If you take this option, you must withdraw at least the minimum amount every year. The simplest method divides your account balance each year by the life expectancy indicated in IRS Publication 590 at www.irs.gov/pub/irs-pdf/p590.pdf . The life expectancy used does not take your health into consideration.

NOTE: If you are at least 55 and retiring, you can take withdrawals from the account without paying any penalty, although the withdrawals will be subject to income tax.

Remember, with a TSA account, your contributions and earnings on those contributions are always fully vested.

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