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March 22, 2022
Question

Military retirement is it subject to 10 percent early withdrawal penalty?

  • March 22, 2022
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    March 22, 2022

    If you are receiving a military pension in regular payments each month you should follow the steps outlined by  @SteamTrain and DianeW777 to avoid the 10% early withdrawal penalty. Please click here for the link.

     

    Under present law, a taxpayer who receives a distribution from a qualified retirement plan prior to age 59½, death, or disability generally is subject to a 10-percent early withdrawal tax on the amount includible in income, unless an exception to the tax applies.

     

    Among other exceptions, the early distribution tax does not apply to distributions made to an employee who separates from service after age 55, or to distributions that are part of a series of substantially equal periodic payments made for the life (or life expectancy) of the employee or the joint lives (or life expectancies) of the employee and his or her beneficiary. Source: Mission Square Retirement

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