Normal Retirement Age

[katieinny]

Is there a minimum age limit when selecting a retirement age in a plan document? For example, what if an employer wanted NRA to be 45? The lowest I've seen is 55, but occasionally an ER will ask if he can use a lower age.

[jaemmons]

I don't see any problem with a NRA of 45, since it doesn't violate the maximum age permissible which is the later of age 65 or age attained at 5 years of plan participation.

[E as in ERISA]

But make sure that he is aware of what happens at normal retirement age (e.g., 100% vesting, distributions become available, etc.) And note that someone might be subject to 72 excise taxes if they take a distribution before 55 or 59-1/2.

[Everett Moreland]

Read Revenue Ruling 78-120.

http://www.taxlinks.com/rulings/1978/revrul78-120.htm