City of Milwaukee 457 Deferred Compensation Plan

Frequently Asked Questions

Do I have to pay taxes and/or penalties on the money I withdraw from the Plan?

Withdrawals from your pre-tax account are subject to State and federal income taxes. However, you are only taxed on withdrawal from the Plan. If you have a Roth 457 account, withdrawals are tax free as long as the distribution is at least five years after the contribution date and you are either over age 59½, disabled, or the distribution is made to your beneficiary subsequent to your death. Withdrawals from section 457 deferred compensation plan assets do not have a penalties assessed because of your age. If you have rolled assets into the plan from a qualified plan additional rules may apply if you are under age 59 ½. Refer to the plans Special Tax notice for more information.