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Can you define exactly what this means in terms of the 10% early withdrawal penalty for IRAs?

I know what it means in English, but in tax speak (written by well regarded members of congress) it can have all kinds of slightly different meanings. I know that one is no longer penalized once they reach that number. But before making any moves, it is important to make sure there are no misunderstandings on what should normally be a really easy concept.

So lets start simply. A person turns 59 on say April 10. That would mean that they turn 59 1/2 six months later on October 10. In order to avoid the 10% penalty, what exact date could the earliest IRA withdrawal occur on?

Is it:

October 10 (the day one turns 59 1/2)
October 11 (the first full day after one turns 59 1/2)
November 1 (the first of the month after one turns 59 1/2)
January 1 (the first day of the first quarter after one turns 59 1/2)
Some other date that I am not even thinking of as a possibility.

I am hoping that the answer is indeed simple and not subject to wide interpretations. Thank you in advance.


B
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Earliest possible withdrawal under the 59 1/2 year rule is october 10, your 69 1/2 year birthday.

If you were born on Feb 29, your 69 1/2 year birthday would be Sep. 1.
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<Earliest possible withdrawal under the 59 1/2 year rule is october 10, your 69 1/2 year birthday.>


So you are saying one has to wait ten more years after 59 1/2 to avoid the 10% penalty. That does not sound right to me.


B
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So you are saying one has to wait ten more years after 59 1/2 to avoid the 10% penalty.

I suspect fat fingers. It's 59 1/2.

Phil
Rule Your Retirement Home Fool
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I'm sorry if I haven't asked my question clearly enough.

I know the general rule is supposed to be 59 1/2. What I am looking to find out is the exact date that the penalty no longer applies. Is it the day one reaches 59 1/2, the day after, the first of the month after that date or some other arbitrary date?

I am looking for the date that would make me 100% positive that a withdrawal made around age 59 1/2 will not trigger a 10% additional tax penalty. I am still in the planning stage, but want to nail down this detail so I don't make a costly mistake based on an incorrect assumption on my part.


B
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What I am looking to find out is the exact date that the penalty no longer applies.

That was answered in the first response, but you got distracted by the typo.

In real-life application I'd wait until the next day, but that's just me.

Phil
Rule Your Retirement Home Fool
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What I am looking to find out is the exact date that the penalty no longer applies. Is it the day one reaches 59 1/2, the day after, the first of the month after that date or some other arbitrary date?

I read it as the day you reach 59 1/2.

"Generally, if you are under age 59½, you must pay a 10% additional tax ..."
http://www.irs.gov/publications/p590/ch01.html

I am still in the planning stage, but want to nail down this detail

Well, if I were in the planning stage, I'd probably be looking at how to avoid withdrawing until I had to. Do you really want to withdraw at age 59.5? (There are circumstances where that is necessary - but if it's so you can take the family on a cruise in the Bahamas this winter, maybe you should re-evaluate)
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Fat fingers it is.
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Well, if I were in the planning stage, I'd probably be looking at how to avoid withdrawing until I had to.

You wouldn't evaluate for the time to pay the least in taxes ? It may not be starting at 70.5.
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