After you separate from service (for example, as a retiree), you have many options of how to receive money from your Wisconsin Deferred Compensation (WDC) account. Only you can make this very personal decision, after thinking about your age, financial needs and other sources of income. Your options include:

  • Leaving your money in the WDC
  • Taking a distribution
  • Rolling your money over to another qualified retirement plan or an IRA

For more help regarding distributions, see the WDC Distribution Options brochure.

Leaving Your Money in the WDC

If you decide to wait to take distributions from your WDC account:

  • You can manage your WDC account and its investments with the same flexibility that was available to you while you were deferring into your account
  • You will continue to receive quarterly statements, newsletters and other information
  • Your account balance will experience investment gains (and/or losses)
  • You may select from the distribution options available through the WDC at that time
  • You will continue to pay WDC administrative fees
  • You must notify the WDC of any address or name changes

However, you must start taking distributions by age 72. This is when the federal government requires you to take minimum distributions.

Your Age and the Required Minimum Distribution (RMD) Rules

Just before you turn 72, the WDC will contact you to let you know you must start withdrawing a RMD  from your WDC account each year. The amount is calculated using your account balance from the year you turn 72 divided by a distribution period from the IRS’s “Uniform Lifetime Table.”

WDC offers an automated minimum distribution option that helps you automatically meet RMD rules. If you would like your minimum distribution amount calculated automatically and distributed to you each year, contact the WDC at 1-877-457-9327 for an Automated Minimum Distribution Request Form. Complete and mail the form to the address listed on the form. You will automatically receive periodic payments from your WDC account until you notify the WDC otherwise.

It is important that you take RMD distributions. The IRS may impose a 50% tax penalty on amounts that should have been distributed under the RMD rule but were not.

Distribution Options

There are many WDC distribution options. Please note that taxes may apply based on the type of distribution that you choose. See taxes for more information.

  • Periodic Payment of an Amount Certain:  You choose the amount you wish to receive on a regular basis (once a month, 4 times a year, twice a year, or once a year). Payments are made to you until your account balance is 0. 
  • Periodic Payment of a Period Certain:  You choose the time that you will receive payments and how often (once a month, 4 times a year, twice a year, or once a year). Payment amounts depend on the length of time you choose, how often you choose them, and the balance of the account at the time of distribution. Your payment may change depending on market ups and downs.
  • Partial Lump-Sum Distribution:  You take a piece of your balance as a partial lump-sum payment. This payment is fully taxable to you in the year you receive the payment.
  • Full Lump-Sum Distribution:  You take your full balance as a lump-sum payment. This payment is fully taxable to you in the year you receive the payment.
  • Partial Lump-Sum and Periodic Payment:  You can ask for a partial lump sum payment after you quit working and then also later set up a periodic payment for the rest of the balance.
  • Periodic Payment and Future Partial Lump-Sum Distributions:  You can take a partial lump-sum payment while receiving a periodic payment. The partial payment will not change your payment schedule, but it will change how long you receive payments. You can take partial lump-sum payments as needed.


A rollover allows you to transfer your WDC account to another qualified retirement plan, or to an IRA. If you chose a direct rollover, a Form 1099-R will be issued for reporting purposes, but no federal income tax will be withheld for you. Please contact your tax advisor or the WDC for more information about rollovers.


If you saved with the WDC using the pre-tax option, then distributions are taxable income. Generally, the mandatory 20% federal income tax withholding will apply to before-tax distributions unless you elect a direct rollover of the entire amount or periodic payments that last longer than 10 years, or if the payment is a minimum required distribution.

If you saved with the WDC using the Roth (post-tax) option, then your after-tax distributions are free from income taxes and penalties if you withdraw your after-tax contributions and earnings after holding the Roth portion of your WDC account for at least 5 years and:

  • You are at least age 59½ and have severed employment (and received your final paycheck)
  • You become disabled
  • You experience an unforeseeable emergency defined as a “severe financial hardship”
  • You die (after which your beneficiary(ies) will take the withdrawal)

If a distribution is made from your after-tax 457 account before you reach age 59½ and it is not due to an unforeseeable emergency, death, disability or you reaching the 5-year period beginning with your first after-tax contribution, you will pay income taxes on any earnings that are distributed.

Federal Income Tax: You will receive an income form (IRS Form 1099-R) from the WDC after any year that you take money from your WDC account. This form will be postmarked by January 31st. If you do not receive a Form 1099-R by February 15th, please call the WDC at 1-877-457-9327 to ask for another form.

State Income Tax:  The WDC will withhold state income taxes per your state of primary residence. Some states, such as Wisconsin, do not require mandatory tax withholding.

Note:  If you take a periodic payment distribution that will last longer than 10 years, you should fill out a WT-4 Employee’s Wisconsin Withholding Exemption Certificate/ New Hire Reporting form to make sure the correct amount is withheld. You can also get the state tax withholding form by contacting the Wisconsin Department of Revenue at 608-266-2486 or the WDC at 1-877-457-9327.

For more information about the WDC and account distribution options:
The WDC office is located at:

5325 Wall Street, Suite 2755
Madison, WI 53718

Map to Madison, WI office