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.
• 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 faculty 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.
If you contribute to the RSP Voluntary Savings Plan, the money you have contributed can be withdrawn however you wish.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 Funds that are withdrawn are subject to federal tax withholding and a 10% penalty if you are under 59 ½ years of age.