Waiver of 10% penalty for law enforcement officers?
I recently had a retired law enforcement officer tell me that he thought that the pension protection act of 2006 allows a law enforcement officer to withdrawal funds from his Ira prior to 59 1/2 and not have a 10% penalty. Is this true?
Permalink Submitted by Alan Spross on Fri, 2010-12-03 17:33
No, not for IRA accounts.
What he is likely referring to is a provision that applies to DEFINED BENEFIT pension plans for qualified public safety employees when they separate from service in the year they turn 50 or later. (Age 55 applies for other employees).
Once any of these funds have been rolled into an IRA, a 72t plan (SEPP) is the usual solution to avoiding the 10% penalty. Of course, these plans are rigid and must be adhered to for the longer of 5 years or until age 59.5, whichever is longer.