How much are retirement funds taxed when withdrawn early?
Janet M asked:
I am retired in SS Disability and need to use my retirement funds to pay off debts. How much should I request they withhold so I don’t end up owing at the end of the year? What are considered personal hardship issues?
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I am retired in SS Disability and need to use my retirement funds to pay off debts. How much should I request they withhold so I don’t end up owing at the end of the year? What are considered personal hardship issues?
February 14th, 2009 at 4:03 pm
If you are totally disabled, you would get the 10% penalty waived.
As for the tax bite, it depends on the rest of your income in the year you take the money. Do a dummy tax return (just use the 2007 one) with varous amounts and see the difference.
February 16th, 2009 at 12:24 am
most funds automatically hold 20% and then after you do your 2008 taxes you could have an additional 10% taken or you might quailfy to get back some of the 20% that was taken when you withdrew it.
February 19th, 2009 at 8:57 am
Whatever your income tax rate is, plus 10% for early withdrawal.
February 21st, 2009 at 7:39 am
They are taxed at your current tax rate (taken into consideration based on how much you take out), plus you are hit with a penalty (10% i think).