L1: 72(t)(2)9A)(v)Employee age 54 separates from service in 2009, will be age 55 in 2010. When is the earliestdistribution cantake placeand avoid premature penalty?2009-06-04 22:20, By: corvette22, IP: [18.104.22.168]
L2: 72(t)(2)9A)(v)Age 59.5
2009-06-04 22:25, By: Gfw, IP: [22.214.171.124]
L3: 72(t)(2)9A)(v)I assume you are talking about a 401-k or other employer-sponsored retirement plan. If he waits until Jan 2010 TO SEPARATE FROM SERVICE, then he can start at that time.
If you are talking about an IRA, it’s 59 1/2 under all circumstances, unless he starts a SEPP 72-T plan.2009-06-05 15:37, By: dlzallestaxes, IP: [126.96.36.199]
L4: 72(t)(2)9A)(v)From the original question… If he separates from service/employment at age 54 in 2009, the age 55 exemption does not apply. He would have to terminate service in 2010, not 2009.2009-06-05 15:46, By: Gfw, IP: [188.8.131.52]
L5: 72(t)(2)9A)(v)If the separation is the employee’s choice, he may want to defer it to next January to get the age 55 separation exception. But if the plan will not offer flexible distribution options, it probably is not worth waiting.
If not the employee’s choice, then the separation will be in 2009, the penalty would apply,but employee may consider a direct rollover anda SEPP plan to escape penalty on IRA distributions for the next few years.2009-06-05 19:06, By: Alan S., IP: [184.108.40.206]