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Plan in which funds are withdrawn or income begins before the plan participant reaches age 59/2.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
Coverage for shippers of certain radioactive materials, such as medical or commercial isotopes, for direct loss or damage by radioactive contamination; does not cover transport of ...
Ratio of excess losses to premium income. Excess losses are those that a reinsurer is responsible for if its coverage is in effect during the period under consideration. The premium income ...
Obligatory reinsurance contract in which a reinsurer agrees to pay for all or a large portion of losses up to a limit, when these losses exceed the retention level of the cedent. The ...
Contract guaranteeing that a person licensed by a city, county, or state agency will perform activities for which the bond was granted, according to the regulations governing the license. ...
Small business retirement plans created by the Small Business Job Protection Act of 1996. These plans permit small business owners who have fewer than 100 employees to establish an employee ...
Coverage for the employer in the event of a tort committed by an employee in the use of his or her own car while conducting business on behalf of the employer. ...
Fronted program by the insured acquires a licensed insurance company to issue insurance policies. ...
Accident policy that covers a traveler for a single trip on an airplane or other common carrier. The name comes from its origin as part of the ticket or ticket stub, but these policies are ...
Type of inland marine insurance that provides coverage for jewels, watches, gold, silver, platinum, pearls, precious and semiprecious stones. Property can be owned by the insured jeweler, ...
Have a question or comment?
We're here to help.