Avoid 10% penalty on Rollover after separating from service and attaining age 55

Submitted by Stephen DeFilippis on Thu, 2013-11-21 17:17

If someone has separated from service after attaining age 55 and rolls over their lump sum pension into an IRA, is there any way to avoid the 10% penalty on withdrawals prior to age 59 1/2 other than 72t? If the pension was taken in monthly installments instead of a lump sum they would be exempt.



Submitted by Alan - IRA critic on Thu, 2013-11-21 17:26

  • There are  other penalty exceptions that might apply to IRA distributions prior to 59.5, but a 72t plan is the only one other than death or disability that establishes a complete exception distribution amount for every year until 59.5. For example, there are exceptions for high medical expenses or higher education expenses that could apply to some of the IRA distributions, but these excepted amounts would differ from year to year.
  • This chart shows all the IRA penalty exceptions available:  http://www.irs.gov/pub/irs-pdf/p5036.pdf


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