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Friday, December 15, 2017
Article written by Tom Turner

What Are Consequences Of Early Retirement Withdrawal?

Unfortunately if you decide on an early retirement withdrawal you will find yourself being hit with a 10% penalty on top of having to pay income tax as well at the top end of the tax bracket. However there are times when you can do an early retirement withdrawal if you incur some expenses because of some dire circumstances such as high medical expenses or because of disability. Also if someone should die and they name you as the beneficiary of their retirement plan then you can withdraw funds from this without incurring the 10% penalty and it does not matter what age you are.

So when you do an early retirement withdrawal you will find that you will be taxed 10% on the taxable amount of the money taken out and this will also include your taxable income as well. It should be noted that this 10% is in addition to what you pay through your regular income taxes as well.

Also it is important that you make sure just how much of an early retirement withdrawal you wish to make from your portfolio each year. Because if you happen to withdraw to much then you will find that you will not have enough left to last right through your retirement but still you do not want to withdraw too little. So if you want to calculate the amounts which would be safe enough for you to do an early retirement withdrawal then look for a retirement calculator (there are plenty of these available online). A retirement calculator will help you to determine what is the right amount of to make. All you do is enter different withdrawal situations into it and then it will calculate out the results and reveal them to you straight away.

By planning an early retirement withdrawal in this way is an important step to take in order that you are not met with large penalties. It is very important that before you make a final decision on whether to take an early retirement withdrawal that if you do you will have enough funds left to cover you during your retirement right up until the day you die.
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