Hi, Lester here. Any changes to 403(b) withdrawal rules?

[LesterLundy]

Hi all,

I retired in 2002 at age 50. I've been taking withdrawals from my 403(b) and paying the 10% penalty. But it just occurred to me that maybe since I am over 55 now I don't have to.

The rules say if you retired in the same year you turned 55 you don't have to pay the penalty.

Anybody know how this works? Is it really true that if I had waited 5 years but not 6 that I could avoid the penalty? Doesn't make a lot of sense to me.

 

[Coach]

Lester, the rule actually says in or after the year you turn 55. But I don't think it does you any good. See IRS publication 575.

There is a mechanism for early withdrawal you should check out called 72(t).

Best of luck!

Coach

 

[LesterLundy]

Lester, the rule actually says in or after the year you turn 55. But I don't think it does you any good. See IRS publication 575.

There is a mechanism for early withdrawal you should check out called 72(t).

Best of luck!

Coach

Thanks Coach. I take about $50K a year, but I don't think it is substantially equal (e.g. $20K and then later $14 and $16K). I should have researched this better, because making a withdrawal schedule would have let me qualify for this.

I'm off to read up on the rule.