How To Terminate A Qualified Retirement Plan?

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   Steve Savant

   Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona

   Your retirement plan is your money whether you're using an employer sponsored or individual plan. But there may be considerable consequences to consider when terminating your plan, especially before age 59 1/2 as the IRS imposes a 10% penalty and ordinary income taxes. In the year of termination, the proceeds from your plan could very well increase your income a couple of tax brackets for that year. If you can wait until after age 59 1/2 and amortize your termination over a longer period, you may be able to keep more of your money.

   Answered on August 4, 2013

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