Early distributions from a solo 401k
If someone retires after age 55 from a business through which they were funding a solo 401k/profit sharing plan, can they take distributions prior to age 59 1/2 without getting hit by the 10% penalty?
Thank you.
If someone retires after age 55 from a business through which they were funding a solo 401k/profit sharing plan, can they take distributions prior to age 59 1/2 without getting hit by the 10% penalty?
Thank you.
Permalink Submitted by Alan - IRA critic on Tue, 2015-10-06 18:40
Maybe for up to one year, but the plan must be terminated after business ceases. Therefore, the plan could not fund penalty free distributions through 59.5. An IRA rollover and 72t plan from the IRS is one possibility. This will explain solo K termination requirements:http://www.pgiselfdirected.com/2014/04/17/terminating-your-solo-401k-plan-irs-requirements/