Withdrawals While Employed by Boston University

The Supplemental Retirement & Savings Plan is intended to provide long-term savings opportunities for your retirement years. However, while you are employed, there may be circumstances in which you will need to make a withdrawal for other important financial needs.

The Internal Revenue Service places restrictions on “in-service” withdrawals. You may not withdraw post-1988 contributions while still employed by Boston University unless you:

  • reach age 59½; or
  • are able to prove financial hardship.

For purposes of making withdrawals under the Supplemental Retirement & Savings Plan, the IRS defines financial hardship as the need for funds to meet certain immediate and heavy expenses. Funds must not be reasonably available from other sources.

Federal withdrawal rules limit hardship withdrawals to needs such as:

  • The purchase price of your primary residence
  • Higher education expenses for you, your spouse, children or other tax dependents
  • Major uninsured medical expenses for you or your dependents
  • Expenses to prevent eviction from your primary residence, or mortgage foreclosure
  • Funeral expenses for your parents, spouse, children, or other tax dependent
  • Expenses for the repair of your principal residence that would qualify for casualty deduction under federal tax rules (but without regard to the 10% limit)

The plan administrator must abide by these rules in considering requests for hardship withdrawals.

You may start making withdrawals or start receiving installment or annuity payments from the Supplemental Retirement & Savings Plan once you reach age 59 1/2 even though you are still employed at Boston University.

Withdrawals are paid as a lump sum in cash. To make a withdrawal, you must complete and submit the appropriate withdrawal form by contacting Fidelity.

Please note: In general, if you are under age 59½ when you make an in-service withdrawal, unless an exception applies, your money will be subject to a 10% penalty tax, in addition to regular income tax if applicable.