Making Your Retirement Stream Last

Early Withdrawals

Most qualified retirement plans, tax sheltered annuities (TSAs), and IRAs allow withdrawals, without penalty, upon attaining age 59½. But there is a 10% penalty tax on withdrawals made before age 59½ (if the funds are not rolled over) from qualified retirement plans, TSAs, and IRAs, unless the distribution is made under one of the limited circumstances allowed by law. These include:

  • distributions made after separation from service with your employer during or after the year in which age 55 is attained (this rule doesn't apply to IRAs);
  • distributions made due to disability or after the employee's death;
  • distributions for qualified medical expenses that exceed 10% (7.5% age 65 or older) of adjusted gross income;
  • distributions after separation from service that are part of a scheduled series of substantially equal periodic payments (the separation from service requirement does not apply to IRAs);
  • distributions from an IRA to pay for qualified higher education expenses;
  • distributions from an IRA to a qualified first-time homebuyer up to a $10,000 lifetime limit;
  • distributions to an "alternate payee" under a divorce court order (i.e., QDRO).
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*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. ("CFS"), a Registered Broker-dealer (Member FINRA/SIPC) and SEC-registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk including possible loss of principal. Investment Representatives are registered through CFS. General Electric Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.