403b Distribution with penalty waiver
I have a client who has a TSA through her school district. Are TSA’s the same as 403b’s? Can she take money out after she is separated from service at age 56 without a penalty?
I have a client who has a TSA through her school district. Are TSA’s the same as 403b’s? Can she take money out after she is separated from service at age 56 without a penalty?
Permalink Submitted by Alan Spross on Fri, 2012-03-09 16:39
Yes, a TSA is included under Sec 403b of the tax code.
The age 55 or later penalty exception does apply to distributions directly taken from a 403b. To fully benefit from this exception however, the plan should allow flexible distributions as opposed to a lump sum.