AboutDavid M Iannopollo Expertise I am a professional financial advisor who can assist you with answers on mutual funds, annuities, IRA's, rollovers, qualified and non-qualified retirement plans, retirement planning, educational planning, life, disability and LTC insurances.
Experience I have over 20 years experience in the business and financial world.
Question Due to a loss of my wife's employment with a private college(her position was eliminated)this summer, we have been placed in a rather difficult financial position. My question is about the 10% penalty for an early withdrawal of her 403B retirement account. Am I correct that if a person is over 55 and loses his or her employment through no fault of their own, can the penalty be avoided?
Answer Hi Donald.
You are referring to the "separation of service rule" which states that a person may take early withdrawal from a Qualified plan (401k,403b, etc) and avoid the 10% penalty. It does not matter why you leave your job. She should however, check with the plan administrator to make sure that she can do this. Some of the investment companies place restrictions on distributions and rollovers if you have not reached a certain age. If she can, I would recommend a rollover. I hope this helps!
