Public Safety Officer Early Withdrawal Penalty

Forum|Forum|2 years ago
January 9, 2024
2 replies
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I am a retired public safety officer 55 years old with 28 years of service. I received a deferred retirement payment that I rolled over into a IRA. It is my understanding that there is a waiver for the 10% early withdrawal penalty. Is there something my bank has to complete for this waiver or will it come up when I do my tax return at the end of the year?

Thanks,

Marty

Not A Product Question

Best answer by dmertz

Bsch4477, is correct. This penalty exception is not available for distributions from an IRA even if the IRA was established by rollover from the plan provided by the organization where you were a public safety officer.

Bsch4477

Employee

I believe that the penalty exemption does not apply to a withdrawal from an IRA.

dmertzAnswer

Employee

mjdesmarteauAuthor

Thanks

Opus 17

Employee

Did you rollover the pension to an IRA, and then withdraw from the IRA? That is taxable plus a penalty, if you are under 59-1/2. Although you can withdraw from at least some workplace retirement plans without penalty if you separate from service after turning 55 or older (age 50 for public safety officers) that only applies to the original workplace plan. Once the money is rolled into an IRA, it becomes IRA money and the age limit is 59-1/2. That's what my colleagues assumed you were asking.

However, it sounded to me like you were asking if there is a penalty on the actual rollover from the pension to the IRA. The actual rollover should not be subject to income tax or a penalty as long as you completed the rollover properly. If you only did a partial rollover, you will pay income tax on the part that was not properly rolled over, but there is no additional penalty after age 50.