You can withdraw RSP retirement funds in two ways: a lump sum withdrawal or a monthly lifetime annuity. You must meet the “Rule of 70,” or be age 55 or older with more than 10 years of service.
1. You may withdraw 60% as a lump sum. The lump sum withdrawal is a onetime option.
You may:
• Rollover the lump sum distribution to a personal IRA account without any tax consequences.
• Keep the 60% lump sum distribution. The money you withdraw is subject to federal tax withholding and a 10% penalty if you are under age 59 ½ years of age.
In order to receive the 60% lump sum distribution, you must call the retirement company you are using for the retirement plan and request a 403(b) distribution form. Complete the form, and send it to Benefits Administration for approval of the withdrawal.
2. Monthly lifetime annuity. Contact the retirement company direct when you are ready to start the annuity so that they can calculate the benefit for you.
RSP Voluntary Savings - 403(b) Distributions
If you contribute to the RSP Voluntary Savings Plan, the money you have contributed can be withdrawn however you wish. Options include:
1. You may rollover the entire account to an IRA (There are no tax consequences on a rollover to an IRA).
2. You may annuitize the entire account (monthly payments for your lifetime)
3. You may withdraw funds as you need them. Funds that are withdrawn are subject to federal tax withholding and a 10% penalty if you are under 59 ½ years of age.
1. Straight Life Annuity: An adjusted monthly retirement income payable during your lifetime and ending with the first day of the month in which your death occurs.
2. Life with 10 Years Guaranteed: A monthly retirement income payable during your lifetime. If you should die before receiving monthly payments for a period of 120 months (10 years), the retirement income will continue to be paid to your beneficiary until the number of guaranteed monthly payments have been made.
3. Contingent Annuitant Option: An adjusted monthly retirement income payable during your lifetime with the provision that after your death, 100 percent, 66 2/3 percent, or 50 percent of such retirement income will be payable monthly to your beneficiary during the remainder of their life. In the event your beneficiary predeceases you, you will continue to receive the same monthly amount as was payable during your joint lifetimes.
4. Joint Survivor Option: An adjusted monthly retirement income payable during the joint lifetime of you and your beneficiary. After the death of either you or your beneficiary, 100 percent, 66 2/3 percent, or 50 percent of such adjusted retirement income will be payable to the survivor during the remaining life of such survivor.
5. Joint Survivor with Ten Year Guarantee Option: An adjusted monthly retirement income payable during the joint lifetime of you and your beneficiary. After the death of either you or your beneficiary, 100 percent, 66 2/3 percent, or 50 percent of such adjusted retirement income will be payable to the survivor during the remaining life of such survivor; except that in the event the survivor dies before a total of 120 monthly payments have been made, the commuted value of the remainder of the guaranteed monthly payments shall be paid to the survivor’s beneficiary in one lump sum.
NOTE: If you were hired before 1980 and transferred to the Faculty Retirement Plan you may have a frozen benefit in the Employees’ Retirement Plan. Please contact Benefits Administration at 305-284-3004 for a calculation of your frozen benefit.
If you meet the Rule of 70, you may withdraw up to 60% of the Faculty Retirement Plan in a lump sum. The lump sum withdrawal is a one time option.
The following are distribution options for a 60% lump sum withdrawal:
• You may rollover the lump sum distribution to a personal IRA account without any tax consequences.
• You may keep the 60% lump sum distribution. The money you withdraw is subject to federal tax withholding and a 10% penalty if you are under age 59 ½ years of age.
In order to receive the 60% lump sum distribution, you must call the retirement company you are using for the faculty retirement plan and request a 403(b) distribution form. Complete the form, and send it to Benefits Administration for approval of the withdrawal.
If you do the 60% lump sum withdrawal, the remaining 40% of the Faculty Retirement Plan employer contributions is meant to be taken in the form of a monthly lifetime annuity at the time you retire or at some future date. If you do not annuitize the 40% by the time you are 70 years of age, you will be required by law to take an annual minimum distribution which the retirement company will calculate for you.
If you do not choose to receive the 60% lump sum distribution, you also have the option of taking 100% of the account in the form of a monthly lifetime annuity. Contact the retirement company directly when you are ready to start the annuity so that they can calculate the benefit for you.
Voluntary Savings Supplemental Retirement Plan - 403(b) Distributions
If you contribute to the Supplemental Retirement Plan 403(b), the money you have contributed can be withdrawn however you wish. Options include:
1. You may rollover the entire account to an IRA (there are no tax consequences on a rollover to an IRA).
2. You may annuitize the entire account (monthly payments for your lifetime).
3. You may withdraw funds as you need them. Funds that are withdrawn are subject to federal tax withholding and a 10% penalty if you are under 59 ½ years of age.
