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Plan in which funds are withdrawn or income begins before the plan participant reaches age 59/2.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
Goals of the financial planning process as follows: Standard of Living Maslow's basic needs satisfied such as food, water, clothing, shelter, and nice-to-have discretionary items, such as ...
Tax, under federal and state laws, on transfer of property made without payment or other value in exchange. ...
One of four types of risks used by the society of actuaries (SA) to determine a life insurance company's overall risk profile when fluctuations in interest rates result in abnormal cash ...
Type of commercial insurance that provides coverage for the business under the following policy forms: Form A employee dishonesty involving money, securities, and other properties and may ...
The definition of short rate cancellation is a penalty method that is applied when an insurance policy is canceled before its expiration date. This penalty method uses a table to determine ...
Attachment of decreasing term life insurance to an ordinary life policy to provide monthly income to a beneficiary if death occurs during a specified period. If the insured dies after the ...
Inquiry conducted by a committee of the legislature of the State of New York in 1905 that looked at abuses of life insurance companies operating in the state. This study led to stricter ...
Amount charged to an insured that reflects expectation of loss for a covered risk; and insurance company expenses and profit. ...
Wording in life insurance policies to determine the order of deaths when the insured and the beneficiary die in the same accident. For example, if the insured is deemed to have died first, ...
Have a question or comment?
We're here to help.