A 56 year old attorney left his job. Soon thereafter, he did a 401(k) rollover into a SEP IRA. The next year (age 57), he took $240,000 out of the SEP IRA account. Because he took the money out of a SEP IRA before age 59 ½, he had to pay the 10% early withdrawal penalty, or $24,000 in taxes. The fact that the money started in a 401(k) account, is irrelevant (Kim, 7th Cir).
Unknown to the attorney (and ...Continue Reading →