If you are considering taking a hardship withdrawal or a loan from your 403(b) account, please be sure to read the information below:
Withdrawing Funds from the Employees' Retirement Plan
This plan does not have provisions that allow for in-service withdrawals or loans.
How to Request a Withdrawal or Loan from Your Investment Carrier
You may request a withdrawal from your 403(b) retirement plan by contacting your investment carrier(s) directly. There are some restrictions on when you are eligible to withdraw the contributions that you put into the plan. Please carefully consider all your options before you withdraw money from your retirement plan. For additional information, please see the Requesting a Hardship Distribution and Requesting a Loan information sheets.
All withdrawals and distributions from the plan are subject to federal and state taxes. You may be subject to a 10% federal tax penalty if you make a withdrawal before age 59 ½. In addition, the federal government requires that 20% of your withdrawal be withheld as a prepayment of your federal income tax due on the taxable portion of the withdrawal. This 20 percent withholding requirement does not apply to direct rollovers to an IRA or a new employer's retirement plan. Contact your investment carrier(s) to request a withdrawal and for complete details about tax implications.
Generally, withdrawals and distributions from your employee contributory amount may commence upon the occurrence of any one of the following events:
- Your disability, as defined in Section 72(m)(7) of the IRS Code,
- Your retirement,
- Your death,
- Your attainment of age 59 ½,
- Your termination of employment with Duke, or
- Your encounter of a financial hardship as defined in the IRS Code and relevant regulations (subject to a six month suspension of employee contributions).
The funds that Duke contributes towards eligible faculty and monthly paid staff may be withdrawn only upon separation from service, retirement, death or attainment of age 67. These funds are referred to as an employer contributory amount and are subject to any restriction, limitation, or fee contained in the contract or agreement with any applicable investment carrier.
You may also request a loan from the contributions that you put into the plan if you participate with either VALIC or TIAA. When you take out a loan, you are simply borrowing money from your retirement plan account. You will repay the loan amount and interest through quarterly payments directly to the investment carrier. The interest you pay on the loan is not tax deductible. However, there are no taxes or penalties unless you default on the loan. If you default on your repayments, you will be taxed as if the outstanding balance of your loan was distributed to you and might possibly include a 10 percent penalty, if you are under the age of 59 ½. Contact VALIC or TIAA to apply for this type of loan. View investment carrier telephone numbers and website addresses.