Inservice Distribution

Key Takeaway

An inservice distribution allows you to take money out of your employer-sponsored retirement plan while still working for that employer, depending on plan guidelines.

You can move your savings to another retirement account or take the funds in cash. A rollover keeps your money tax‑deferred, while a cash payout may trigger taxes and penalties.

If you’ve left your employer, you may be eligible to take a full distribution of your retirement account by selecting Employment Separation. If you do not have this as an available option, please contact your former employer to update your status.

Your Options

Cash Distribution

A cash distribution pays the funds directly to you.

  • The taxable portion is subject to 20% mandatory federal withholding and any required state withholding.
  • If you are under age 59½, an additional 10% early withdrawal penalty may apply.
  • You will receive a Form 1099‑R to report the distribution at tax time.

If you’re unsure which option is right for you, reviewing your tax situation or speaking with a tax advisor may be helpful.

Rollover

A rollover lets you move your account balance to another qualified retirement plan or IRA.

  • The rollover is not taxable at the time it is made.
  • Your savings stay invested for future retirement needs.
  • This option helps keep your long‑term strategy on track.

Additional Things to Know

  • Outstanding Loans
    If you have an outstanding loan, the loan will not be impacted by the inservice distribution as requested online.
  • Processing Times
    Distribution processing times vary based on your plan’s rules and the payment method you select.
  • Tax Form Timing
    Your Form 1099‑R will be issued after the end of the calendar year in which the distribution is processed.

If you’re unsure which option is right for you, reviewing your tax situation or speaking with a tax advisor may be helpful.