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-   -   Will I be penalized for early withdrawal? (https://www.askmehelpdesk.com/showthread.php?t=183642)

  • Feb 13, 2008, 10:34 AM
    dy0428
    Will I be penalized for early withdrawal?
    I rolled over a 401K into another plan (stocks & bonds), because I changed jobs. Last year I had to withdraw all of it due to financial problems. I had surgery and had medical expenses to pay, house pymts, and separated from my husband. My medical bills did not exceed the 7.5% of my annual income. I paid taxes on my withdrawal, but will I still be penalized the 10% fee?
  • Feb 13, 2008, 11:32 AM
    MukatA
    Yes, you will pay 10% Early withdrawal penalty unless you qualify for the exceptions. Your medical expenses don't qualify as exception.
    You may qualify under: A divorce-driven 401K distribution is QDRO (Qualified Domestic Relations Order), which qualifies as an exception to the 10% Early Withdrawal Penalty.

    Refer to IRS Publication 575, Pension and Annuity Income.
    Internal Revenue Service

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