Hardship Withdrawls from 403(b)7

[Guest sommernyte]

Is it possible to take a hardship withdrawl from a 403(B)7? I had a 403(B)7 for one year, and have since had an e401(k). I am facing serious financial difficulties (like might have to file bankruptcy) and wondered if there is a way I can get the money from my 403(B)7 since I no longer contribute to it anyways.

I really don't understand any of this, so please use detail in explaining things... any help is *greatly* appreciated in this matter.

Sommer

[QDROphile]

Assuming that your 403(B) arrangement allows for hardship withdrawals (which it might not because it is not required to allow them), if the arrangement is a custodial account under 403(B)(7), only elective deferral amounts may be withdrawn before termination of employment. Elective deferrals amounts are the amounts you chose to come out of your pay and go into the arrangement instead. If you had a match or other employer-funded contribution, it is not eligible for withdrawal before termination of employment.

Rule of thumb for determining if you have a 403(B)(7) cutodial account is whether you go though a mutual fund. If you go through an insurance company, it is probably not a 403(B)(7) and the hardship distribution could tap earnings on contributions (if the contract allows).

You imply that your 401(k) plan is an additional plan of the same employer. If you terminted from employment under the employer that provided the 403(B) plan you have a separate basis for getting your money.

Try not to take the money if at all possible even if you can get it under a hardship provision. By the tme you pay all the taxes on it, including the additional 10% tax if you are not 59 1/2, it won't look like much. Furthermore, you won't be able to replace it in the future, so you will have lost the significant value of deferral of taxes on the earnings.

The thing to do is ask. You will be told what you can and cannot get.

[Guest sommernyte]

Oh, the reason I don't have the 403(B)7 anymore is because I no longer work for that University (or any educational institution). It was through Vanguard, if that makes a difference.

[jlf]

Isofar as you separated from service you may withdraw the 403b money at will. There is no necessity to prove or claim hardship.

Best wishes,

Joel L. Frank