GLOSSARY · RETIREMENT WITHDRAWALS & EARLY ACCESS

10% early-withdrawal tax

An additional 10% tax on distributions from retirement accounts taken before age 59½, on top of ordinary income tax, unless an exception applies (for example separation from service in or after the year you turn 55 for a 401(k), or a 72(t) series).

Also called: early withdrawal penalty, 10 percent penalty, 59 and a half rule

COMPUTE IT WITH YOUR NUMBERS

72(t) SEPP →How much can I take before 59½ without the 10% penalty?401(k) withdrawal when leaving the US →Leaving the US on a visa: what do I net if I cash out now vs later, leave it or roll it over?

LEARN IT PROPERLY

CHAPTER · RETIREMENT PLANNING FUNDAMENTALS · FOUNDATIONS401(k), IRA and Roth: How the Accounts Differ CHAPTER · RETIREMENT PLANNING FUNDAMENTALS · FOUNDATIONSA Retirement Timeline by Age

SOURCES

Topic No. 558, Additional tax on early distributions from retirement plans other than IRAs. Internal Revenue Service.

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