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How to Handle Profit Sharing Distribution
Old 10-18-2006, 08:10 PM   #1
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How to Handle Profit Sharing Distribution

Plan to retire in 3 years at age 55. Will have about 600K in Profit Sharing. I would like to take 100K to pay off my mortgage. Can I do that without getting the 10% penalty for early withdrawl plus take payments on the remaining amount via 72t.
Thanks,
Rollie
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Re: How to Handle Profit Sharing Distribution
Old 10-19-2006, 09:06 AM   #2
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Re: How to Handle Profit Sharing Distribution

This is a 401k profit sharing plan? If so, if you are leaving the job with the plan in the year you turn 55, there will be no penalty on the distributions you take. Of course, you will have to pay income taxes. The 72t rules regarding substantially equal payments won't apply unless you roll the money into an IRA.

http://www.irs.gov/publications/p575/index.html

See this too: http://early-retirement.org/forums/i...31935#msg31935
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Re: How to Handle Profit Sharing Distribution
Old 10-19-2006, 09:56 AM   #3
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Re: How to Handle Profit Sharing Distribution

Quote:
Originally Posted by Martha
This is a 401k profit sharing plan? If so, if you are leaving the job with the plan in the year you turn 55, there will be no penalty on the distributions you take. Of course, you will have to pay income taxes. The 72t rules regarding substantially equal payments won't apply unless you roll the money into an IRA.

http://www.irs.gov/publications/p575/index.html

See this too: http://early-retirement.org/forums/i...31935#msg31935
Just noticed the thread................Martha beat me to it............
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Re: How to Handle Profit Sharing Distribution
Old 10-19-2006, 03:51 PM   #4
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Re: How to Handle Profit Sharing Distribution

Thanks for the info!
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