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Ask Lane Your Own Question
Category: Tax
Satisfied Customers: 9696
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Am I allowed at age 59 1/2 to take my 403B out and put it

Customer Question

am I allowed at age 59 1/2 to take my 403B out and put it into CDs or other funds elsewhere - not with my job - while still working for the same company? (Without penalty, without paying taxes yet)
Submitted: 1 month ago.
Category: Tax
Expert:  Lane replied 1 month ago.

Hi. I can help you with this. My name's Lane


The answer to that depends on two things:


(1) whether the 401(b) plan allows in service withdrawals (some do, some do not), and

(2) whether the money in the 401(b) has ever been taxed ... (likely not)


Now that you are age 59 and 1/2 there is no longer a 10% penalty tax, but the dollars are ALWAYS added to your other income for the year that you take it out, becasue the dollars went INTO the plan on a pre-tax basis


For example, lets say you earmed 1000 week, and contributed 200 to the 403(b); Only 800 of your income was taxed. (essentially a tax deduction) ... Those dollars grew tax deferred too (no tax on the growth along the way) .. but once you begin to pull them, this is now taxed.


Again, no Additional ta PENALTY, but always taxed.


And you can ask the 403(b) administrator about whether in-service withdrawals are allowed, if you are still working

Expert:  Lane replied 1 month ago.

. … Please let me know if you have any questions at all, before rating me


If this HAS helped, and you DON’T have other questions … I'd appreciate a positive rating (using the stars or faces on your screen, and then clicking “submit")

Otherwise I’m working for no crediting at all here


Thank you!


I hold a law degree, (Juris Doctorate), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in financial accounting & tax, a BBA, and CFP & CRPS designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice, since 1986

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