Withdrawal FAQs

Read the following article about managing your retirement savings to help you make the right decisions. Learn more.

Money may be withdrawn from your account when you reach a distributable event determined by your plan. These may include some in-service events such as attaining age 59½, a hardship or unforeseeable emergency, or may require that you have a severance from service.

Check your plan rules to find out when you are eligible to request a withdrawal from your workplace retirement account. Individual retirement accounts are normally eligible to request a withdrawal at your discretion.

Some plans permit in-service withdrawals at age of 59½ while others permit in-service withdrawals at age 70½. If you have rolled funds into your plan from an IRA or former employer plan, you may have withdrawal rights while you are employed. Additionally, some plans permit hardship withdrawals or unforeseeable emergency withdrawals.

Some plans allow you to request and authorize your withdrawal electronically online. For plans that require a paper form you will be notified if additional steps are necessary to obtain approval of your online withdrawal request such as additional signatures or documentation. When a paper form must be submitted, a pre-filled form with further instructions will be available for you to download, print and sign prior to submission. Forms can be uploaded directly from your online account to process your request. If you are unable to upload the form to the website instructions will be provided for other ways to submit your documents.

Note:  An electronic signature, or e-signature, on paper forms cannot be accepted and will cause your withdrawal request to be rejected.

You can choose between a Net or Gross withdrawal.

Net Withdrawal

If you choose a net withdrawal, taxes will be added to the amount you request and withdrawn from your account. You will receive the full amount you requested but you will be taxed on the amount you receive plus the tax withheld for your transaction (the gross withdrawal amount.)

For example, if you request a $5,000 withdrawal it will be grossed up for federal and state taxes of $1,250. The total amount deducted from your account would be approximately $6,250.

Gross Withdrawal

If you choose a gross withdrawal, taxes will be subtracted from the amount you request. You will receive the amount you requested less the taxes withheld.

For example, if you request a $5,000 withdrawal, and have 20% in federal taxes withheld and 5% in state taxes withheld, your will received approximately $3,750 ($5,000-$1,250).

After making your Net or Gross selection, you can then choose to withdraw your money by selecting specific account(s) or by selecting specific fund(s) in your account(s).

You have two options. You can choose the amount to be withdrawn from each eligible account or you can choose the amount to be withdrawn from each eligible fund.

What does "Specify by account(s)" mean?

Use this option if you want to choose the withdrawal amount from each of your eligible accounts. We will disburse your funds proportionately (pro rata) against all funds in each chosen account, excluding Schwab PCRA, if applicable.

For example, if you withdraw $100 and you're invested in 5 eligible funds, and each fund equals 20% of your account balance, then $20 will be withdrawn from each of your eligible funds.

What does "Specify by fund(s)" mean?

Use this option if you want to choose the amount to be withdrawn from the funds in each of your eligible accounts, excluding Schwab PCRA, if applicable.

For example, if you withdraw $100 and you're invested in 5 eligible funds, then you can specify the withdrawal amount from all your funds, a few funds or just one fund. It’s up to you.

Note: You will be prompted with a message when you are invested in funds that are not eligible for online withdrawal.

Tax consequences may vary based on the type of retirement plan you have. Typically, you might expect:

• Withdrawals are taxed as ordinary income for federal and state income taxes.
• We may be required to withhold up to 20% toward your federal income taxes.
• We may be required to withhold a percentage of the amount withdrawn for state income taxes, depending on where you live.
• If you are under the age of 59 ½, you may incur an additional 10% early withdrawal tax penalty.
• If you request a total surrender of your account, any taxable unpaid loan balances will be subject to income taxes and penalties.

Do I qualify for a penalty exception?  

Note: You will be provided with the Special Tax Notice which provides important information about distributions and withdrawals from your employer retirement plan and includes information about eligible rollover distributions, and taxes. Please read the Special Tax Notice carefully and keep it for your records.  

Yes, following is a partial list of withdrawals not subject to the 10% early withdrawal penalty:

• The account owner is over age 59½.
• The account owner stopped working for the employer during or after the year he or she turned age 55.
• Payments up to the amount of the account owner’s deductible medical expenses.
• Qualified first-time homebuyer exclusion – up to $10,000 to purchase a primary residence.
• Substantially equal period payments over the lifetime of the participant or the participant and beneficiary.
• Account holder has been deemed disabled.
• Certain payments from nonqualified annuities attributable to contributions made prior to 8/14/1982 plus earnings.

Taxable amounts that are eligible for rollover are subject to a mandatory 20% federal withholding; however, the amount of tax on your distribution is determined by your marginal tax rate.

The accounts are not taxed differently. Certain types of accounts include only tax deferred contributions and earnings. For example, if you contribute to a retirement account with pretax dollars, all of the distributions will be subject to ordinary income tax at the time of withdrawal.

For Roth accounts, whether retirement plan or IRA accounts, the contributions are deposited on an after-tax basis. If you meet the requirements for a qualified withdrawal, the earnings are not taxed when withdrawn. A qualified withdrawal requires that the first contribution must have been in a Roth account for at least five years and that the account owner has attained age 59½, become disabled or died, before the withdrawal can be entirely tax free. The contributions in a Roth account will always be withdrawn on a tax-free basis, since they are taxed in the year of deposit.

What you should know about 403(b) plans.  Learn more.

The timing depends on several factors including the time and the day your withdrawal request is submitted and whether your money is delivered to you by direct deposit (EFT) into your bank account on file or by a paper check via the mail.
 

Electronic Funds Transfer (EFT)

If you request an electronic funds transfer (EFT), it typically takes 3‐5 business days for your funds to be received in your bank account after you submit your withdrawal request. The date that your funds are made available to you in your bank account is according to when your request is processed and your bank's own electronic funds processing policies.
 

Paper Check

If you choose to have a physical check mailed to your address of record, it will be sent by regular United States mail. Please allow up to ten business days for receipt of your check.

Your plan type will determine whether you qualify for a hardship or an unforeseeable emergency withdrawal while still employed. There are specific reasons outlined by your plan that permit withdrawals to help cover unexpected expenses.
 

Hardship withdrawals are typically available from 403(b) and 401(k) plans for the following reasons. Depending upon your plan, you may need to show supporting documentation for your hardship. Safe harbor reasons for a hardship withdrawal are:
 

• Funeral expenses
• Eligible medical expenses
• Prevent eviction from or foreclosure of the employee’s principal residence
• Home repairs due to casualty loss
• Purchase of your principal residence
• Expenses resulting from a FEMA declared disaster
• Eligible tuition and related fees

Note: Some plans permit facts and circumstances determinations of hardship reasons.

Unforeseeable emergency withdrawals must be expenses that are unforeseeable. They are typically available from 457(b) plans and may include events such as the following reasons. Depending upon your plan, you may need to show supporting documentation for your unforeseeable emergency:
 

• Funeral expenses
• Prevent eviction or foreclosure
• Eligible medical expenses
• Home repairs due to uninsured casualty loss
• Expenses resulting from a FEMA declared disaster
• Child support payments
• Pay delinquent taxes
• Automobile repair or replacement due to casualty loss
• Attorney expenses

You may be able to take a loan instead of a withdrawal. When you take a loan, you are taking a loan against your own account. Learn more.

A paper form is required to request a rollover, transfer or exchange to another carrier or individual retirement account.

Tax form 1099-R will be generated by January 31st of the calendar year following your distribution and reported to the Internal Revenue Service for the year of the distribution.

Certain plans require that a married participant must obtain spousal consent to all withdrawals distributed from the plan in any form other than a joint and survivor annuity.

If your plan is covered under the Employee Retirement Income Security Act (ERISA) or if the plan document requires spousal consent for distributions, you will be required to verify if you are married, not married, or legally separated.  Depending upon your selection you may need to provide supporting documents.

• If married, your spouse will need to sign in the spousal consent section of the withdrawal form. Your spouse’s signature must be witnessed and notarized by a notary public or authorized by a Plan Administrator, if applicable.
• If legally separated you will need to provide a court order of legal separation, in lieu of spousal signature.
• If unable to locate your spouse, your Plan Administrator may be able to waive the requirement of spousal consent based on extraordinary circumstances. The Plan Administrator will need to determine that spousal consent cannot be obtained because your spouse cannot be located or there is no spouse, if applicable. The Plan Administrator may request that you provide supporting documentation such as:
  
  - A judicial determination that your spouse’s whereabouts cannot be determined.
  
  - An affidavit from you and at least two other persons, at least one who is not related to you, attesting to the inability to locate your spouse which may include the efforts made to locate the missing spouse and documentary evidence such as newspaper reports about the disappearance of your spouse.

Note: Guardianship paperwork will need to be submitted with your withdrawal form for you to sign on behalf of your spouse. Your signature as Power of Attorney will not be accepted in lieu of spousal signature.

Your Plan Administrator may be required to sign the form in accordance with your plan rules.

You may or may not be entitled to the full account balance contributed by your employer if you’re not fully vested.

You are not required to pay back money you withdraw from your retirement account.

The federal CARES Act, passed in March 2020, permitted certain withdrawals up to $100,000 from your retirement account(s) if adopted by the plan. The provisions for such withdrawals expired December 30, 2020. The CARES Act also provided that withdrawals could be spread over three years for income tax purposes and could be repaid within three years, in whole or in part. Amounts repaid are not taxable. Distributions that qualified under the plan CARES Act provisions were not subject to the 10% early withdrawal penalty.

Beginning at the later of age 72 (age is 70½ if you were born before July 1, 1949), or retirement, a client who is not a 5% owner of the employer sponsoring the plan, must begin making withdrawals from retirement plans. An owner of 5% or more of an organization as well as IRA owners and participants of retirement plans of former employers, must begin taking distributions at age 72 (age is 72 if you were born after June 30, 1949). This requirement to draw down retirement accounts is referred to as Required Minimum Distributions (RMDs). The amount that must be withdrawn is based on the prior calendar year end balance and the account owner’s life expectancy based on the life expectancy tables in the Treasury Regulations. RMDs are not required of Roth IRA owners during their lifetime.

If you are not otherwise eligible to make a withdrawal from your retirement plan, and the plan permits, you may be able to take a hardship or unforeseeable withdrawal for expenses incurred by your primary beneficiary.

If permitted by your plan, a reservist ordered or called to active duty after September 11, 2001, on active duty for at least 180 days or for an indefinite period, is eligible to make a withdrawal. The taxable portion of the withdrawal is subject to regular income tax but is not subject to the 10% early withdrawal penalty. Such a withdrawal may be repaid to an individual retirement plan within a two-year period beginning the day after the end of the active duty period.  

Note: The money must be withdrawn during the time of active duty.

A Qualified Domestic Relations Order (QDRO) is a court order used to assign plan assets between the participant and an alternate payee. It can either be a separate court order or it can be incorporated into a divorce decree and requires transfer of all or part of an account to an alternate payee. The alternate payee can be a spouse, former spouse, child or dependent.

Generally, severance from employment with the employer who sponsors a retirement plan qualifies as a distributable event under the terms of the plan. (Some plans provide for a temporary delay after the last day of your employment before you can make a withdrawal.)

• Some plans limit distributions to lump sum payments only.
• Many permit partial withdrawals, installment payments (monthly, quarterly, semi-annual or annual basis), annuitization or lump sum payments.
• Generally, no immediate withdrawal is required, and you can continue to keep your benefits invested in the plan even after your employment has ended.

If you are enrolled to receive transaction status confirmations you will receive an email. Or you can check the withdrawal status online in the message center.

If you have any questions or need assistance in printing the form, contact the Client Care Center at 1.800-448.2542.

Some plans do not allow online withdrawals. If a paper form is required, additional instructions will be provided to help you print and submit the completed form. Most plans allow you to obtain the form you need by accessing your account online.

If your plan permits birth or adoption withdrawals:

• You may request a withdrawal within one-year of your child’s birth or final adoption.
• The maximum amount is $5,000 per each birth or adoption aggregated across your employer sponsored plan(s) and IRA(s).
• To qualify, you will need to provide the following supporting documents along with your withdrawal form when you submit your request for processing: SECURE Act Supplemental Distribution Form, VL 31081 and either a copy of your child’s birth certificate or a copy of the finalized court order.

You can view and print a 1099-R form for a previous tax year in the view statements section of your online account or you can contact the Client Care Center at 1.800.448.2542 for help.

Payments from your retirement account on a monthly, quarterly, semi-annual, or annual basis, are available in most plans. You will need to submit a paper withdrawal form to initiate these types of requests.  In most cases, you can request a systematic withdrawal when you meet a distributable event under the terms of your workplace retirement plan. Some plans provide for a temporary delay after the last day of your employment.

You can review your withdrawal history on the transaction history page in your online account, your statement or in the message center online at www.CorebridgeFinancial.com/retirementservices.

Named beneficiaries will need to contact the Client Care Center to initiate a Death Claim withdrawal. Death Claim withdrawals are subject to tax withholding based on the plan type. The claim form will provide information on payment options and the timing within which you need to begin receiving distributions. Please contact a Financial Professional concerning withdrawal strategy options and advice.

You have several options available.

• You can login to www.CorebridgeFinancial.com/retirementservices and upload your form via the Message Center in your online account.
• You can fax your form to 1.800.858.2542. Attention: Corebridge Retirement Services Document Control
• You can mail your form to:

Regular US Mail:

Corebridge Retirement Services Document Control
P.O. Box 15648
Amarillo, TX 79105-5648

Overnight delivery:

Corebridge Retirement Services Document Control
1050 N. Western Street
Amarillo, TX  79106-7011

This material is general in nature, was developed for educational use only, and is not intended to provide financial, legal, fiduciary, accounting, or tax advice, nor is it intended to make any recommendations. Applicable laws and regulations are complex and subject to change. Please consult with your financial professional regarding your situation. For legal, accounting or tax advice, consult the appropriate professional.

Your prior employer’s plan also may allow you to leave the funds in the plan. If so, you may want to carefully review your alternatives, including their costs and features, to determine what is right for you.

Withdrawals may be subject to withdrawal charges and federal and/or state income taxes. A 10% federal early withdrawal tax penalty may apply if taken before age 59½.