Tax on 401(a) DB payments

[Guest herronisland]

Help--someone told me today that if I retire before age 55, there is a 10% tax penalty on my retirement benefit payments.

Please tell me that the person was dead wrong. Lots of people retire with 30 years before age 55...I can't believe they have to pay a tax penalty!

herronisland@attbi.com

[Guest b2kates]

one of the exceptions to the penalty is if you draw out your pension in an annuity and do not change the amount until the later of age 55 or 5 years of collecting.

[Guest herronisland]

Thank you. Since my plan is strictly DB, and the only way to get the money IS in regular annuity payments, it sounds like I have nothing to worry about.