Retire Soon
Full time employment: Posting here.
- Joined
- Nov 23, 2005
- Messages
- 655
A friend of mine who is 55 years old will be retiring from a school district in June and will begin collecting a pension at that time. She will then do occasional substitute teaching.
She would like to withdraw money from her 403(b) as soon as she retires. Under section 72 (t) of the IRS code it says that if she withdraws "substantially equal periodic payments" that she can avoid the 10% tax penalty, provided that she "Separates from Service." http://www.irs.gov/pub/irs-drop/rr-02-62.pdf
The problem is that she will not be separating from service, since she will be substituting.
My question is this: can she do a Rollover IRA and avoid the "Separation from Service" requirement and thus not have to pay the 10% tax penalty, since she plans to receive "substantially equal periodic payments?" I am hoping that someone on this board can answer that question. Any help or suggestions would be greatly appreciated.
She would like to withdraw money from her 403(b) as soon as she retires. Under section 72 (t) of the IRS code it says that if she withdraws "substantially equal periodic payments" that she can avoid the 10% tax penalty, provided that she "Separates from Service." http://www.irs.gov/pub/irs-drop/rr-02-62.pdf
The problem is that she will not be separating from service, since she will be substituting.
My question is this: can she do a Rollover IRA and avoid the "Separation from Service" requirement and thus not have to pay the 10% tax penalty, since she plans to receive "substantially equal periodic payments?" I am hoping that someone on this board can answer that question. Any help or suggestions would be greatly appreciated.