Early Distributions From Section 401(a), 403(a), 403(b) Retirement Plan
Plan in which funds are withdrawn or income begins before the plan participant reaches age 59/2. An extra 10% early distribution tax on the taxable amount may have to be paid unless any one of the following conditions exist:
- distribution because the participant is disabled;
- participant is separated from job after the attainment of at least age 55 and the distribution is received at that time;
- participant terminates job and begins to receive annuity income consisting of a series of substantially equal payments at regular intervals (at least on an annual basis) over the lifetime, or life expectancy, or joint life expectancies of the participant and the participant's beneficiary;
- participant incurs medical expenses of at least 7/2% of adjusted gross income. If the participant dies before reaching age 59/2, the beneficiary (s) will not be subject to the payment of the 10% early distribution tax.
The availability of cash withdrawals and annuity income based on funds contributed as well as earnings on those funds under salary reduction plans beginning January 1,1989 is restricted by the Internal Revenue Code. Such withdrawals and receipt of income can only be made if the plan participant is at least age 59/4, terminates employment, becomes disabled, or dies.
Popular Insurance Terms
Death from other than accidental means. ...
State operated insurance company used in workers compensation insurance in some states where the risks are so great that the commercial insurance companies cannot operate at affordable ...
Shortened report showing pertinent insurance policy information, copies of which are distributed in the insurance company's home office and branch offices, as well as to agents and brokers. ...
Amount in a cash value life insurance policy that a policy owner will receive upon surrender of the policy, minus any outstanding loan and accrued interest. A table in the policy shows the ...
Model state law designed to govern use of information collected from insurance applications. The law forbids any insurer or agent from impersonating someone else to gain information about ...
Limited pay whole life policy under which all premium payments have been made. For example, a 20 pay policy is completely paid for after 20 payments; no future premiums have to be made, and ...
Coverage for bodily injury, property damage or destruction, for which the insured garage and/or its representatives become legally liable resulting from the operation of the garage. For ...
Model state law of the NAIC that requires that the insurance policy contain language that meets a readability test (usually, the Flesch readability test that uses a formula approach to ...
Government agency whose function is to administer the Federal Flood Insurance Program, the Federal Crime Insurance Program, and the fair access to insurance requirement (fair) plan. ...
Have a question or comment?
We're here to help.