How The Fund Works

Features
Withdrawals

An outline of your withdrawal options while working
for the Y and after you leave the Y.

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While you are working for the Y

Your After-Tax Account and Rollover Account may be withdrawn at any time. If you are age 59½ or older, you can withdraw your entire 403(b) Smart Account. However, until you reach age 59½, you may only withdraw your 403(b) Smart Account if you meet the IRS requirements for a financial hardship withdrawal. No other accounts can be withdrawn while still working at a Y.

The IRS defines a financial hardship as:

  • Medical expenses incurred or expected to incur, or to obtain medical care not covered by health insurance for the participant or for their dependents 
  • Costs directly related to the purchase of a primary residence (excluding mortgage payments) 

  • Tuition payments for the next 12 months of college or post-secondary school for the participant or for their dependents

  • To prevent eviction from or foreclosure upon their primary residence 

  • Payments for burial or funeral expenses for the participant’s deceased spouse, parent, child or dependent 

  • Expenses for the repair of damage to the participant’s primary residence that qualify for a casualty deduction under IRC Section 165

Documentation to substantiate a hardship withdrawal request must be provided to the Fund. The Fund accepts the following types of documentation:

Medical expenses: Copies of medical bills and the Explanation of Benefit statements from an insurer indicating amounts not covered by health insurance, or other proof of out-of-pocket costs incurred, or expected to incur, as a result of unreimbursed medical expenses. In the case of ongoing medical treatment, a licensed physician's statement estimating planned treatment and associated employee or dependent cost.

Purchase of primary residence: Copy of purchase and sales agreement, including estimated or actual closing costs, signed by both buyer and seller.

Post-secondary tuition and expenses: Copy of acceptance or enrollment verification from a college or post-secondary school, including copy of a bill or statement for tuition and related covered expenses.

Payment to prevent eviction/foreclosure: Copy of eviction or foreclosure notice, including documentation of amount needed to prevent eviction or foreclosure.

Burial or funeral expenses: Copy of bill, invoice, or estimate from service provider for covered services along with brief description of decedent's relationship to you.

Property casualty repairs: Copy of bill, invoice, or estimate for repairs from a contractor, along with a written description of the casualty that caused the damage.

Before you qualify for a hardship withdrawal, you must first withdraw any After-Tax or Rollover Accounts you may have with the Fund. You must also use the loan option available through the Savings Plan. The hardship withdrawal can only be taken from your principal balance which is the amount you have personally contributed and not the interest earned. At the time of withdrawal, you may be subject to federal and state taxes. Lastly, you may not make any voluntary contributions for six months after taking a hardship withdrawal.

Taxes and Penalties

Unless you roll your money over to an IRA or eligible employer plan, it is subject to taxes and potential IRS penalties. The Fund is required to withhold 20% of the taxable portion of your withdrawal for federal income taxes. If you are under age 59½, the IRS may require an additional 10% penalty at the time you file year-end income taxes. With respect to hardship withdrawals, the preceding cannot be rolled over and you may elect not to have taxes withheld by the Fund.

Getting Your Money
In order to take a hardship withdrawal, you will need to complete a form, which can be obtained by contacting Customer Service, and mail it to the Fund. Once the Fund receives your original form properly completed, it will take seven to ten business days to process your request (not including mailing time).

For non-hardship withdrawals, log in to Your Account to see whether you are eligible for a withdrawal and to start the process. If you are eligible, once you submit your request, the process will take seven to ten business days (not including mailing time).

When you leave the Y

If the total of your accounts in either the Retirement Plan or Savings Plan (including rollover accounts) is more than $5,000, you can keep your balances in that Plan until you are ready to start an annuity or take a distribution.

If either Plan has $5,000 or less, within 90 days of leaving you must take a withdrawal or roll it over to another qualified employer plan or IRA. If you do not notify the Retirement Fund of your choice to receive your distribution directly or to have it rolled-over to your IRA or eligible employee plan, after 90 days, the Fund will  automatically roll over your distribution to a Safe Harbor IRA at Millennium Trust Company. An exception is if you have more than $5,000 in the Retirement Plan but $5,000 or less in the Savings Plan. Then you may leave both Plans at the Fund.

Neither you nor the Y can make further contributions once you have left employment. However, if you leave your accounts at the Fund, they will continue to earn interest.

Once your Y has notified the Fund that you have left employment, you will receive a letter outlining your options.

If you have both of the following accounts, you can take a withdrawal based on your age and balance at the time you make the request:


YOUR AGE YOUR BALANCE

YMCA ACCOUNT

YMCA ACCOUNT (Legacy)

55 or Older The sum of both accounts is $50,000 or less


If the above example is not applicable, you can take a withdrawal based on the following:


YOUR AGE YOUR BALANCE

YMCA ACCOUNT

Under 55 $5,000 or less when you request the withdrawal
55 or Older $50,000 or less when you request the withdrawal

YMCA ACCOUNT (Legacy)

Any Age  $25,000 or less at the time you terminated Y employment


If your account(s) does not qualify for a withdrawal, you can use the funds for an annuity as early as age 55.

Partial Withdrawals

You may take a partial withdrawal from your accounts in the Retirement Plan or Savings Plan if:

  • You are eligible to take a full withdrawal from that Plan (withdrawal rules for the YMCA Account and YMCA Account (Legacy) above may prohibit both a partial and full withdrawal from the Retirement Plan), and  

  • You have an available balance of $10,000 or more in that Plan, and

  • Your withdrawal does not result in that Plan’s available balance dropping to $5,000 or below.

Only one partial withdrawal per Plan is allowed in a three-month period.

Taxes and Penalties
Unless you roll your money over to an IRA or eligible employer plan, it is subject to taxes and potential IRS penalties, The Fund is required to withhold 20% of the taxable portion of your withdrawal for federal income taxes. If you are under age 59½, the IRS may require an additional 10% penalty at the time you file year-end income taxes.

Getting Your Money
Log in to Your Account to see whether you are eligible for a withdrawal and to start the process. If you are eligible, once you submit your request, the process will take seven to ten business days (not including mailing time).