ESOP prior to 59.5
Client is retired. Over 55 but under 59.5
From ESOP he wants to do partial IRA rollover and partial lump sum.
Would the lump sum have a 10% penalty?
I know from a 401k it doesn’t.
But does it from an ESOP?
Client is retired. Over 55 but under 59.5
From ESOP he wants to do partial IRA rollover and partial lump sum.
Would the lump sum have a 10% penalty?
I know from a 401k it doesn’t.
But does it from an ESOP?
Permalink Submitted by Alan - IRA critic on Wed, 2023-11-22 22:44
If you are referring to the separation from service at 55 penalty exception, it will apply to ESOP as it does for a 401k. Client may also want to consider NUA if the ESOP shares are highly appreciated since the NUA would be taxed at the lower LTCG rate.