Company 401k Plans
- rasputin
- Rande
- rasputin
- Rande
- zabarski
- Rande
- jfritz
- JenL_2
- danepoteet
- Rande
This archived discussion is "read only".
For the corresponding "live" discussions, post in the active topic forum here.
« Previous 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 Next »
» rasputin - I should know this and...
I could look it up, but one of you'se guys will know it off the top of your head. What's that part about 401k's that allows you to take distributions before the age of 59-1/2 if you separate from your company? How early can you take them? And is it a percentage? Thanks. And hey Jen thanks for the Dow chart regarding market lows on the other thread.-- posted by rasputin
» Rande - Re: I should know this and...
In response to message posted by rasputin:ras,
No 10% penalty for distributions if you are 55 or older and separate from service. Otherwise, even if you've already rolled over into an IRA, you could annuitize distributions until you reach age 59 1/2 (but for no less than five years in any event) to avoid penalties.
-- posted by Rande
» Rande - Re: Re: Re: I should know this and...
In response to message posted by rasputin:Yes. You could annuitize your IRA at any age, so long as you stick to the schedule for at least five years or age 59 1/2, whichever is longer. Of course, the younger you are the smaller the payments will be based on IRS actuarial tables. Not to mention the loss of tax-deffered compounding forever. The age 55 exception for 401k distributions on separation from service does not require annuitization. All distributions are subject to ordinary income taxes, of course. We're just talking about exceptions to the 10% federal exise tax on premature distributions.
-- posted by Rande
» danepoteet - Re: Re: I should know this and...
I know all of this but my question is what it specific secion and wording of Section 72t that allows this.-- posted by danepoteet
» Rande - Re: Re: Re: I should know this and...
In response to message posted by danepoteet:danepoteet,
See IRC §72(t)(2)(A)(v)
[10% penalty]...shall not apply to any of the following distributions:
....made to an employee after separation from service after attainment of age 55,
See sub-part (iv) for reference to annuitization and also refer to §72(t)(4)(A) for the at least 5-year, etc. rule on substantially equal payments.
-- posted by Rande
« Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 Next »
Please follow the guidelines set forth in the Suite101 Posting Etiquette when adding to the discussion.