Hardship – 403(b) Plan

If you or your beneficiary is faced with a financial hardship, you may qualify for a distribution without tax penalty. Rules for Hardship Distributions under the 403(b) are more generous than those of the Unforeseeable Emergency under the 457(b).

Qualifications

Immediate and heavy financial need (may include you or your spouse, dependent, or beneficiary):

  • Certain medical expenses
  • Costs relating to the purchase of a principal residence
  • Unpaid college tuition and related educational fees and expenses
  • Payments necessary to prevent eviction from, or foreclosure on, a principal residence
  • Burial or funeral expenses for immediate family members
  • Certain expenses for the repair of damage to the employee's principal residence

Necessary to satisfy the financial need, meaning you:

  • Obtained all other currently available distributions and loans under the Plan and all other Plans maintained by the employer
  • Are not allowed to make contributions to any qualified Plan for a period of 6 months after receiving a hardship distribution

Not relieved by:

  • Stopping contributions
  • Reimbursement by insurance
  • Reasonable liquidation of assets
  • Borrowing from commercial resources


Administered and Marketed by American Fidelity Assurance Company, dba AFPlanServ®

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