NUA Trigger Event

Submitted by Vickie Intriago on Fri, 2024-06-14 19:41

Client separated from service in 2023 and will reach the age of 59 1/2 in October 2024.   Is the mere separation of service enough to allow him to begin the NUA process ?  Or, must he also wait until he is 59 1/2?

Assuming he has taken no inservice withdrawals can we start the NUA process now and not wait until late October 2024?



Submitted by Alan - IRA critic on Sat, 2024-06-15 00:26

Separation from service is a valid triggering event for NUA, so the LSD could be requested now. The 10% penalty on the taxable cost basis will not apply due to the separation from service at age 55 or later exception.

Submitted by Vickie Intriago on Mon, 2024-06-17 16:25

LSD?  What is that?

Submitted by Alan - IRA critic on Mon, 2024-06-17 18:03

LSD = lump sum distribution. A total distribution (LSD) of all similar plans (eg 401k and ESOP) must be done in order to utilize NUA.

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