10 ways to avoid a penalty for taking an early retirement-account withdrawal because of COVID-19

[RV_]

Excerpt:

"Penalty tax exceptions for early withdrawals from qualified retirement plans

Oddly enough, the list of exceptions to the federal 10% early withdrawal penalty tax for qualified retirement plans, such as 401(k) and profit-sharing plans, is not exactly the same as the list of exceptions for IRAs.

In another oddity, there’s no specific penalty tax exception for early retirement plan withdrawals due to general financial hardship. So-called hardship withdrawals are sometimes the only way to get money out of a company plan without permanently leaving your job. However, you may find that one of the penalty exceptions explained below applies to a hardship withdrawal. If so, you won’t get hit with the 10% early withdrawal penalty tax.

With those thoughts in mind, here’s the list of penalty exceptions for early qualified retirement plan withdrawals."

See the full article for these recommendations from Market Watch here: https://www.marketwatch.com/story/thinking-about-taking-an-early-retirement-account-withdrawal-here-are-10-ways-to-avoid-a-penalty-in-the-covid-19-era-2020-08-26

[Kirk W]

Interesting article. Wish that I was young enough to use that advice!  😊

[RV_]

Kirk,

I still am and may move and downsize one more time. My son and DIL, both nurses got an offer to become Civil Service and they are moving to Germany with our granddaughter and grandson next month to work at the Landstuhl hospital near Ramstein. At least we had a year of our grand kids and a very good excuse to go visit some old friends too. We were stationed in Germany January 1990- January 1997.

So if we can make a good profit, I would not be averse to selling and moving one last time if there were an even better place for climate and mild weather like here.

I posted here because for fulltimers about to come off the road, like we were, with no stix n brix, we had to buy our five acre place right off in their area. But since we were caring for our last two parents, hers, we had no choice of where, and no offense, but we detest the South and the climate. I Mowed my large for a subdivision yard yesterday and it was 93 degrees but 15% humidity! MY shirt didn't even get wet. IN Louisiana my shirt, long jeans, even my socks and sneakers would be drenched. And that is on a riding lawnmower and push mowing the trim. This place, except for folks with heart or pulmonary problems, is almost ideal. We are away from the fire areas. Hail is the only concern. And that is like tornados in LA, only a small area is actually hit.

I've only used my snow blower four times last winter, our first back here. And we've renovated everything but the garage insulation and painted pegboard walls instead of sheetrock that we are doing next. MY son just put his up for sale and it sold the same day it was first listed. He made about $50k profit but it wasn't paid off. Mine is and we are free to look. I think we'll likely stay here. If the Covid doesn't get us.

When we were looking to move closer to the kids I found some places in surrounding states that were cheaper than buying in Louisiana for a nice place in a nice neighborhood like we have here. San Diego has the best weather in the CONUS. But it is more pricey than here! My mom lived there since 1967, and back when we were RVing she had Alzheimer's and we went straight there every year and on the way back a couple of trips too.

[RV_]

YW Rudi. Welcome to the Escapees forums. If you can elaborate and perhaps clear the ambiguities up I'd appreciate it too. I am still a novice at these and about to experience it soon with my wife's IRA.

Plus that was almost a year ago and things may have changed or clarified.

Edited June 16, 2021 by RV_

[NamMedevac 70]

 As a former small business financial and tax accountant and SEC CFP I use to know all this but that was a long long time ago and there has been no need for me to stay up to date since retirement.  My specialty then was S Corporations and both Congress and IRS kept changing the rules and regs frequently on these corporations that kept me hopping.  I remember Reagan was then POTUS I think.

The worst paper work requirement for me was not the Feds or IRS but rather the Great State of Texas.  There is not enough space here to list all the paperwork burdens Texas then placed on small business and may rival California, NY, etc.  Thanks RV for your recent updates on this and other topics.  Three cheers for you sport.

Former legislative aid and pilot to two Texas Governors

https://www.facebook.com/media/set/?set=a.2111685582466949&type=3

[RV_]

YW Bill, glad you find some of them useful.