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. Dividend Yield

    A financial ratio that shows how much a company pays out in dividends each year relative to its share price.
  2. Fixed-Income Security

    An investment that provides a return in the form of fixed periodic payments and the eventual return of principal at maturity. ...
  3. Free Cash Flow - FCF

    A measure of financial performance calculated as operating cash flow minus capital expenditures. Free cash flow (FCF) represents ...
  4. Leverage Ratio

    Any ratio used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to ...
  5. Two And Twenty

    A type of compensation structure that hedge fund managers typically employ in which part of compensation is performance based. ...
  6. Market Capitalization

    The total dollar market value of all of a company's outstanding shares. Market capitalization is calculated by multiplying ...
Trading Center