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Life Planning Center > Getting Ready To Retire / Retired
Distributions from Your Retirement Plan
  • Introduction
  • What Initiates a Distribution?
  • Five Dates You Should Know
  • Selecting a Distribution Option
  • Deciding on a Payout Option
  • Annuity Form of Payout
  • Advantages and Disadvantages of Taking an Annuity
  • Taking a Lump-Sum Distribution: Know Your Options
  • Annuity vs. Managing Your Own Retirement Assets
  • Advantages and Disadvantages of a Lump-Sum Distribution
  • The Roth IRA–How Does It Fit In?
  • Making the Decision: Annuity or Lump-Sum?
  • Taxation of Distribution Options
  • Rollover into a Traditional IRA
  • Advantages and Disadvantages of Rollover to a Traditional IRA
  • Annuity Payouts
  • Early Distributions
  • Should You Defer Your Retirement Plan Distribution as Long as Possible?
  • Distributions Following Death

Five Dates You Should Know

As you approach retirement, there are five important ages you need to remember because they have a direct impact on how and when you may want to withdraw assets from your qualified retirement plans:

  • Connect with a Financial Consultant
  • Age 55. If you take early retirement, quit your job or separate from service at age 55, you can receive your money from your qualified retirement plans without paying a 10% early withdrawal penalty to the IRS (see the section Taxation of Distribution Options). Note: This rule does not apply to IRAs.
  • Age 59½. Anyone age 59½ or older can withdraw money from their traditional IRA, from a Roth IRA if it was held five years, or from a qualified retirement plan if the plan provisions allow withdrawals, without the 10% penalty applying. You also may be able to receive a lump-sum distribution from your retirement plans. However, if your retirement plan allows, you can withdraw funds from your plan or traditional IRA prior to age 59½ without penalty, if you take the withdrawals in substantially equal annual payments based on your life expectancy.
  • Age 62. You can begin receiving reduced Social Security benefits. Also, some companies will allow you to receive full pension benefits with no early retirement reduction, if you retire at age 62.
  • Age 65. You are eligible for Medicare coverage and possibly full Social Security benefits, and at most companies, full pension benefits. (If you were born after 1937, the age at which you are eligible for full Social Security benefits is increasing (see the section on Social Security benefits.)
  • Age 72 (70½ if you reached age 70 1/2 by January 1,2020). You have to begin making withdrawals from traditional IRAs and possibly other plans, the minimum amount depends on the balances in your plans, as well as your remaining life expectancy , and usually your spouse's life expectancy (see the section Taxation of Distribution Options). If you are still employed, distributions from your qualified retirement plan may be able to be deferred until you actually retire.
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Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Franklin Mint Federal Credit Union and Mint Wealth Advisors are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Mint Wealth Advisors, and may also be employees of Franklin Mint Federal Credit Union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Franklin Mint Federal Credit Union or Mint Wealth Advisors. Securities and insurance offered through LPL or its affiliates are:

Not NCUA Insuredor Any Other Government Agency No Credit Union Guarantee Not Credit Union Deposits May Lose Value

The LPL Financial Registered Representatives associated with this site may only discuss and/or transact securities business with residents of the following states: NJ, PA, NY, DE, AZ, MI, FL, MD, TX, VA, GA, NC.



Financial Learning Center content created by TrueBridge, Inc. The information provided is based upon sources and data believed to be accurate and reliable. The content contained herein is intended for information and illustrative purposes only, should not in any way be construed as a personal recommendation, and should be used in conjunction with individual professional advice.

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