Some Can Avoid 10% Penalty on Retirement Withdrawals

Financial Planners


Q: My wife and I have been talking about retiring now instead of waiting until I’m 60, but we don’t want to pay the early withdrawal 10% tax before age 59 1/2. Is there anything I can do? – BG, Orlando

A: Employees who are laid off or terminated between the ages of 55 and 59½ can withdraw money from their 401(k) or 403(b) plans without penalty. However, this only applies to her current 401(k) or 403(b) assets. Not if you have money in a previous 401(k), 403(b), or IRA. You must start withdrawing your funds without penalty until you are 59½ years old. – John Cash III

Q: I have a lot of losses in my non-retirement securities account. Can I use these losses for my tax return? – BM Oviedo

A: Yes, when you sell a loss-making investment, the profit offsets the investment you sell. If the result is a net loss, the loss is up to $3,000 and is used as a deduction against other income on your tax return. Please consult your tax advisor for details. – Tommy Lucas

I have a question? Send an email to askanexpert@fpafla.com. Please include your name (initials only), hometown, and phone number. Questions will be answered by certified financial planners from the Financial Planning Association of Central Florida. Answers are for educational purposes only. You should also consult a financial expert. Questions and answers may be edited for space considerations.



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