A:

Congratulations on retiring at the young age of 59! You may withdraw assets from your SIMPLE IRA at any time, and there is no maximum or minimum restriction on the amount you can withdraw; rather, withdrawals are optional until you reach age 70 ½. Since you will be at least age 59 ½ when the distributions occur, you will not owe any early-distribution penalties (the 10% additional tax which applies to distributions made before an individual reaches the age of 59 ½). You will, however, owe income tax on the amount you withdraw from the SIMPLE during the year.

When you reach age 70 ½, you will have to begin required minimum distributions (RMDs). At this time, you may distribute the full balance of the IRA or distribute a minimum amount each year. Your IRA custodian will help you calculate the RMD amount. Before you decide to withdraw your SIMPLE balance, you should consult with your financial advisor, who should be able to help you use your SIMPLE IRA balance, along with your other assets, to plan for a financially secure retirement.

(For more on SIMPLE plans, see Introduction To SIMPLE 401(k) Plans and SIMPLE IRA Vs SIMPLE 401(k) Plans.)

This question was answered by Denise Appleby(Contact Denise)

Hot Definitions
  1. Trickle-Down Theory

    An economic idea which states that decreasing marginal and capital gains tax rates - especially for corporations, investors ...
  2. North American Free Trade Agreement - NAFTA

    A regulation implemented on Jan. 1, 1994, that eventually eliminated tariffs to encourage economic activity between the United ...
  3. Agency Theory

    A supposition that explains the relationship between principals and agents in business. Agency theory is concerned with resolving ...
  4. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with a maturity of less than one year. T-bills are sold in denominations ...
  5. Index

    A statistical measure of change in an economy or a securities market. In the case of financial markets, an index is a hypothetical ...
  6. Return on Market Value of Equity - ROME

    Return on market value of equity (ROME) is a comparative measure typically used by analysts to identify companies that generate ...
Trading Center