Almost like found money

It’s my hope that no one needs to access their retirement plans prior to age 59 1/2. And with a 10% premature penalty, it makes it a very unattractive option if funds are necessary. And I would like to remind you, or inform you, that there are exceptions to this penalty. IRS Section 72 (t) allows the following exceptions:

  • You have non-reimbursed deductible medical expenses equal or greater than the distribution.
  • You are at least age 55 and you are separated from service from the institution where the plan is held.
  • You need the proceeds to pay a qualified divorce/family order.
  • You are totally and permanently disabled.

Some additional possibilities are:

  • You are out of work and you need to pay health insurance premiums.
  • You are paying for higher education.
  • You are paying back taxes and a levy has been placed against the IRA.

Please seek the advice of your tax advisor before taking withdrawals. There are limitations on how long the money has been held in the account and my explanation is not sufficiently detailed.

GOOD NEWS FOR THOSE OVER AGE 70 ½.
In 2009 you will not be required to make RMD’s, required minimum distributions. Unfortunately in 2008 you will.

JUST FOR FUN:
A dollar may not go as far as it used to, but what it lacks in distance it makes up in speed.
Author Unknown

Found this information helpful? Please let me know. Want more information about financial planning? Looking for someone new to help you with your taxes? I do individual income tax preparation.

I will offer 1/2 hour of complimentary hourly financial planning with each tax return that I prepare. It’s a great way to get some advice AND get your taxes done early.

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