A 457 plan offers special tax benefits to encourage employees of government agencies and certain non-profits to save for retirement. If you meet the criteria for taking a distribution from your 457 plan, you simply fill out a distribution request form from the financial institution that manages your 457 plan. You're eligible for a distribution after you've left the organization you were working for or, if you work for a government organization, for an unforeseen financial emergency. If, however, you work for a non-profit, your 457 plan can't permit distributions for financial emergencies.
Unforeseen Financial Emergencies
Unforeseen financial emergencies must be either a serious hardship that results from illness or injury for you, your spouse or your dependent; damage or destruction of your property; or a similar extraordinary and unforeseeable financial emergency. Examples include impending foreclosure of your main home, medical expenses for yourself, your spouse or your kids, or funeral expenses.
Tax Implications
You are permitted to withdraw money from your 457 plan without any penalties from the Internal Revenue Service no matter how old you are. However, you will have to pay income taxes on the distributions. For example, if you're 45 when you leave the organization and you take out $10,000, you owe income taxes, but no early withdrawal penalty, on that amount.