How can I avoid the 10% early retirement withdrawal as a public safety employee retiring before age 50?

I'm a public safety employee and will retire prior to my 50th birthday. How can I rollover my lump-sum distribution and withdraw at age 50 to avoid the 10% early withdrawal?

Personal Finance, Retirement
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June 2017

You didn't say what you plan to do with your career when you are 50.  Do you have enough savings to last for another 50 years?  If so, then you are permitted to write a letter to the IRS announcing that you are annuitizing your retirement accounts.  You can then make withdrawals from your retirement accounts annually based upon a schedule provided by the IRS for this purpose, and there is no 10% penalty for early withdrawal.

However, unless you have millions of dollars saved, it is probably more realistic to transfer (not rollover!) your retirement account into two IRA accounts:  the before-tax money to be transferred into a traditional IRA account, and the after-tax money into a Roth IRA account.  Do not withdraw any money from these accounts for at least a decade after you retire from your current job; get some other job which allows you to pay all necessary bills without going into debt.

If you don't work when you're in your 50s then it will be even harder afterward to get into the habit of doing so.

June 2017
June 2017
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June 2017