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. Co-pay

    A type of insurance policy where the insured pays a specified amount of out-of-pocket expenses for health-care services such ...
  2. Protectionism

    Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local ...
  3. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  4. Demonetization

    Demonetization is the act of stripping a currency unit of its status as legal tender and is necessary whenever there is a ...
  5. Investment

    An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic ...
  6. Redlining

    The unethical practice whereby financial institutions make it extremely difficult or impossible for residents of poor inner-city ...
Trading Center