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Early Withdrawals
Making Your Retirement Stream Last
- Get Familiar with Your Choices
- Making the Decision: Annuity or Lump Sum?
- Taking a Lump-Sum Distribution: Know Your Options
- Moving from Your Company's Retirement Plan Before You Retire
- Early Withdrawals
Early Withdrawals
Most qualified retirement plans, tax sheltered annuities (TSAs), and IRAs allow withdrawals, without penalty, upon attaining age 59½. But there is a 10% penalty tax on withdrawals made before age 59½ (if the funds are not rolled over) from qualified retirement plans, TSAs, and IRAs, unless the distribution is made under one of the limited circumstances allowed by law. These include:
- distributions made after separation from service with your employer during or after the year in which age 55 is attained (this rule doesn't apply to IRAs);
- distributions made due to disability or after the employee's death;
- distributions for qualified medical expenses that exceed 10% of adjusted gross income (7.5% in 2019);
- distributions after separation from service that are part of a scheduled series of substantially equal periodic payments (the separation from service requirement does not apply to IRAs);
- distributions from an IRA to pay for qualified higher education expenses;
- distributions from an IRA to a qualified first-time homebuyer up to a $10,000 lifetime limit;
- distributions to an "alternate payee" under a divorce court order (i.e., QDRO).
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Investment and Insurance products are not products and services of Bank of Zachary. Content is informational only and is not FDIC insured.
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