[purple1]

In 1994 I started a TIAA-CREF Traditional 403b account that a company I worked for also contributed to. I contributed to it until 1995, at which time I became a Graduate student, and had to drop back to part-time work. I have not worked for the company since 1998. As of 2006, I became disabled as a result of extensive back surgery. I started receiving Medicare as of 11/2009. I currently receive less than $850 a month in S.S.D.I. and in today's economy, that's not much! I could also qualify for S.S.I. housing assistance, and certain government programs out there except for one thing... the 403b with TIAA-CREF is just now worth under $10,000. I must not have more than $2,000 in assets in order to qualify for assistance to many programs I am other wise eligible for. I have talked to several TIAA-CREF customer assistance people, and according to them, the only way I can get any money out of the account is by dispersal in two ways. One is receiving $1,000 a year, or something like $46 a month. That would take YEARS to get my assests down to under $2000. I have been refused assistance based on that account alone. I could also use the help to pay back rent, medical bills, and fix my car. I went for a consult with a lawyer, and he suggested that I sell the policy. My question is, Can I sell my traditional 403b policy, and if so,where, or who would buy it?

All suggestions would be greatly appreciated!

[ebaines]

It sounds like your plan severely limits withdrawals to only those "hardship" purposes that the IRS requires, and unfortunately being disabled does not qualify as a "hardship" for this purpose. Here's an idea - you can roll your 403(b) into your own rollover IRA, and then take a distribution from there. One advantage of this is that distributons from an IRA because of disability are not penalized the extra 10% early withdrawal fee, so it will save you some money. You will have to pay income tax on the distribution though.

[purple1]

Thank you for taking the time to respond to my question. I have already talked to TIAA-CREF about withdrawals under hardship, and they told me what you have confirmed, that being disabled does not qualify one for hardship. If I were to roll over the 403b into an IRA, would the distribution of the money in my 403b account be the same as if I were to start to withdrawal funds from the account - either $900-$1000 a year or $40 some a month?

[ebaines]

No - what TIAA-CREF is talking about is something called a "section 72(t)" distribution, which is a way of avoiding the 10% early withdrawal penalty. It basically requires that you start a steady stream of distributions that will last your entire lifetime or at least until age 59-1/2. The IRS description of this is:

Made as part of a series of substantially equal periodic payments beginning after separation from service and made at least annually for the life or life expectancy of the participant or the joint lives or life expectancies of the participant and his or her designated beneficiary. (The payments under this exception, except in the case of death or disability, must continue for at least 5 years or until the employee reaches age 59½, whichever is the longer period.)

This type of withdrawal is only available for 401(k)/403(B), not IRAs. The IRA would allow you to take out whatever you want, when you want, based on your disability. However, as you start investigating possible IRA custodians, you should ask them to verify that you will be allowed to take what you need without penalty.