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Plan in which funds are withdrawn or income begins before the plan participant reaches age 59/2.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
State law that stipulates that the worth of separate accounts must be valued at current market with the exception of those separate accounts established and maintained for guaranteed ...
Property damage resulting from aircraft traveling faster than the speed of sound. Although the vibrations caused by such high speed can cause damage, it is excluded on most property forms. ...
Agreement that eliminates tariffs among the United States, Canada, and Mexico over a 15-year period. Approximately 65% of United States agricultural and industrial exports would be eligible ...
Written contract between an insured and an insurance company stating the obligations and responsibilities of each party. ...
Describing automobile accidents that are considered to be the results of the negligent acts of the insured driver and are included in the driving record of that insured. ...
Benefits provided to and obtained by those insured, while still alive. They include the annuity, cash surrender value, disability income, policy loan, and waiver of premium (WP). ...
Insurance for which (1) an application has been filed but the first premium has not yet been paid or (2) a life insurance policy that has not yet been delivered to an insured. ...
Additional amount of surplus generated by an additional amount of capital to be included in the surplus above that required by the statutory requirements. This additional surplus is ...
Bond derivatives of short-term duration whose principal or coupon value is determined by a market index. Market indexes that can be utilized include securities, commodity prices, and ...
Have a question or comment?
We're here to help.