distributions at age 59.5
Can a person begin taking distributions from a traditional IRA in the year they will turn 59.5 or do they have to wait until the date they actually are 59.5 in order to avoid the early distribution penalty? Assuming that no exceptions to the penalty apply.
Permalink Submitted by tomd37 on Tue, 2011-04-12 01:47
The person has to have attained the age of 59.5 at the date of distribution. I would wait until several days thereafter. It is the custodian who reports the distribution and that custodian has to code the Form 1099-R, box 7 accordingly.
Tom D.
Permalink Submitted by Alan Spross on Tue, 2011-04-12 01:50
They must wait until they actually reach 59.5, 6 months after their 59th birthday.
This is different from the age 55 separation exception for qualified plans. For that exception, you just need to separate from service sometime during the year you reach age 55 or later. That could be almost a full year prior to the 55th birthday.