Finance Quick Answers
I have lost my job and am wondering what will happen if I withdraw money from my qualified retirement plan or IRA?
Generally speaking, if you withdraw the funds before you reach eligible age, and do not roll it over into anther qualified retirement plan or Individual Retirement Account (IRA) within 60 days, that amount will be taxable income in the year in which it is withdrawn. You may also have to pay an additional 10% tax on those early distributions. There are special rules for computing tax on lump-sum distributions. See IRS Publication 17 or Publication 575 for detailed information.
For more information on the tax consequences of a job
Tax Impact of Job Loss.
Source: IRS, Tax Impact of Job Loss, 2002.
Last update: Tuesday, July 15, 2008