Accessing your money before retirement
Money can be withdrawn from the Plan in these events:
- Severance from employment
- You attain age 59½ or older
- Unforeseeable emergency which is defined as a severe financial hardship resulting from a sudden and unexpected illness or accident (involving the participant or dependent), a loss of property due to casualty, or other similar extraordinary and unforeseeable circumstances due to events beyond your control.
- Attainment of age 72 (age 70½ if born before July 1, 1949). If you reach age 72 and have not separated from service, you can elect to defer receipt no later than April 1 of the year following separation from service.
- A one-time withdrawal is allowed if your account balance is $5,000 or less and there have been no deferrals for the past two years and no prior withdrawals of this type have been taken.
Income taxes are payable upon withdrawal and federal restrictions apply to early withdrawals. Be sure to talk with your tax advisor before withdrawing any money from your Plan account.
The Plan is intended to help you put aside money for your retirement. However, University System of Georgia has included a Plan feature that enables you to access money from the Plan.
The amount the Plan can loan to you is limited by rules under the tax law. All loans will be limited to the lesser of: 100% of your vested account balance up to $10,000, or 50% of your vested account balance for loans in excess of $10,000, not to exceed $50,000.
The minimum loan amount is $1,000.
All loans must generally be repaid within five years. A longer term may be available if the loan is to be used to purchase your principal residence.
You can have two loans outstanding at a time: one general purpose loan and one mortgage loan.
You pay interest back to your account. The interest rate on your loan will be the Prime Rate plus 1%
A $50 processing fee for all new loans and a $25.00 per year loan maintenance fee are charged to your account.
Unpaid loan amounts will be taxed as ordinary income.
Other requirements and limits must be met prior to borrowing money from your account. For additional information regarding loans, please see your financial professional.