how to avoid as much penalties as possible

L1: how to avoid as much pen. as poss.I am in between jobs and need to tap into my retirement acc. with a previous employer. How can I do this and avoid penalties?2007-12-03 06:52, By: D T, IP: [67.35.156.120]
L2: how to avoid as much pen. as poss.You need to provide information. Your age, types of retirement accounts and respective amounts, amount needed now in lump sum, and future amounts needed on a monthly basis. Also, have you used up your credit card limits, considered home equity line of credit or loan, refinancing, etc. ?
The SEPP 72-T is probably NOT your best source because you would be locked into the plan for the longer of 5 yaers or age 59 1/2. Assuming that you get another job within that time period, these distributions could put you in a higher tax bracket. On the other hand, if you set up a plan using all of your retirement accounts, and need more emergency funds faster, then you would be subject to the 10% penalty (in addition to regular income taxes) RETROACTIVELY on all distributions cumulatively from the beginning of your SEPP 72-T plan. So, you might be better off with just taking distributions as you need them, and pay the 10% penalty only on those funds.
HOWEVER, see if you qualify for under the exceptions to the penalty for “Distributions to the extent unreimbursed medical expenses exceed 7.5% of AGI (Adjusted Gross Income), or to pay health insurance premiums for certain unemployed individuals (such as forCOBRA health insurance premiums).”2007-12-03 10:29, By: dlzallestaxes, IP: [151.197.161.195]