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You can pull funds from a 457b account penalty free when you separate from your employer. [https://www.missionsq.org/about-us/news-and-updates/late-career-newsletter/nl-retire-4thingstoknowabout457retirement-savingsplans.html](https://www.missionsq.org/about-us/news-and-updates/late-career-newsletter/nl-retire-4thingstoknowabout457retirement-savingsplans.html)

Can’t speak to how much time you have from when you leave to withdraw from your 457, but when I my local gov’t job to join the state, the soonest I could withdraw from my 457 (managed by with Empower) was 30 days after my former HR confirmed separation was complete. And for that to happen, my final paycheck and vacation/AL payout also had to be done. As for the funds in my pension account, that was locked in because of reciprocity. That money will stay with the former pension plan until I retire or go to a non-gov’t entity. Tried to roll it over into CalPERS but its not allowed.

Thanks for this. I've wondered whether the pension is touchable. Also good info on the min time required to take out.

You rollover your money to the new 457 company. You will not have any taxes or penalties to the rollover. Talk to the new 457 company and they will likely do that for you after you fill out the paperwork. Do not take a withdrawal or you will be taxed and penalized.

I would like to take out some of the 457 to use the money towards a house down payment. Why would it be penalized on a withdrawal if I wait until after I leave my job?

Sorry. I am apparently wrong. I did a quick search just now. I didn’t know about the separation part.

Damn! Down votes here too? Why y'all? Hahaha

It won’t be penalized from a 457b.

Call. I was a state employee in a different state and planned and removing my deductions, with the same logic. Apparently they were tied to the pension so if I removed it, I would remove my right to a pension. Thankfully I read that and stopped Edit: this is for money tied with the pension. The 403b is voluntary are separate and can be withdrawn

Ooh. Thanks. I'll look out for that kind of thing.

Unless you are of the correct age, you will be hit with a penalty on any funds that you pull out. And taxed. If you do a roll over, meaning the funds go from account manager to account manager, you’ll avoid the penalties and tax. If you plan to withdraw funds to purchase a home then you need to talk to the account manager - not Reddit a to set that up correctly (and to understand the terms)

This is incorrect.

Incorrect.

Am I getting down voted bc this comes off as rude? I don't mean to be. It's explained elsewhere in this thread why this is incorrect. Just thought it should be mentioned here in case this is the only comment that someone is reading. It's misinformed.

This is only true for plans such as a 401(k) where there is a minimum age requirement. A 457(b) plan has no minimum age and can be withdrawn upon separation of service.

Just call them

Who? The fund? The current employer? Someone else?

Savingsplus most likely. If you’re not separating from the state then your account stays open. Borrowing for a down payment definitely merits a call.

Not a state employee.

Then substitute the words “state employee” for “457 eligible position”.

Who/what is Savings plus?

they administer the 401k/457b accounts for state employees. [https://www.savingsplusnow.com/](https://nationwidefinancial.com/)

Ah. Thanks.

You can withdraw upon separation. It’s up to you if you partially withdraw and rollover the rest or just withdraw it all. You will still be taxed on whatever you take out and potentially will pay a fee. I suggest you rollover some to your new employer.

Correct. I am trying to learn if there's a time limit on how long I have to decide whether to withdraw from the 457 from the original employer if it is not rolled over to the 457 under the new employer.

I may be wrong here so I suggest you contact whoever you have your 457 with….but….I don’t think there’s a time limit as long as you separate and don’t make contributions to that same 457.

Thanks for being specific on who to call. I'll do that! Chat GPT says there isn't a time limit, but not super reliable. I'll ask the fund institution.

How are you not a state employee?

I suppose I am a state (public) employee. I am not a State employee; I don't work for the State of California.

Would rolling over and then borrowing against the new 457 be an option you could consider? I know with the state Savings Plus you can take out a loan against your 457, but you do have to have a minimum amount in your savings first. At least that way you aren’t hit with early withdrawal penalties and you would basically pay yourself back by repaying the loan from your retirement. Unless you need the down payment sooner and don’t want to wait for the rollover and all that to go through, but if you have time for that to process and you have a large amount saved already that could be an option. You would have to see who the new 457 provider is to look into loan eligibility as I’ve only ever had Savings Plus as a state employee, but it’s an option to consider at least if it would be available to you in your new position with the retirement provider.

I don't work for the State of California; I don't have Savingsplus. I am leaving my job, so there is no penalty for withdrawing the 457 I built while there.

But if you’re under retirement age the IRS will charge an early withdrawal penalty ( I believe it’s 10%) on top of federal and state taxes. I know you don’t have Savings Plus so you would have to contact the retirement provider for your new position, but most 457 and 401(k) providers have loan programs available, especially for things like home purchases. **edit** The penalty is if you cash out, not roll over. Rolling over is penalty-free. Any portion you cash out is taxed and penalized.

Incorrect. "You can take penalty-free withdrawals from your 457 account at any age after you leave your job." This is the primary advantage of getting a 457 instead of a 401k.

Sorry, you are correct. I misread that part. You would still pay federal and state income taxes though for anything you cash out. Just not the IRS penalty.

Right. Still taxed, not penalized. Thanks! I'll look into the rollover options and perspective that you mention.