document.write('<p><b><font class="heading">Tap Your Retirement Money Early And Minimize Penalties</font></b></p><p><font class="text"');
document.write('>There are ways to withdraw funds early from retirement plans like your 401(k) without getting hit with a tax penalty.</');
document.write('p><p>The rules are a bit rigid and, from a long-term perspective, you should think carefully before taking money out o');
document.write('f your retirement plan until you\'re retired. In most cases, it\'s not the best strategy. Nonetheless, it can be done.</p>');
document.write('<p>First, you need to know the rules. Distributions from employer-sponsored retirement plans and individual retirement');
document.write(' accounts (IRAs) are subject to a 10% penalty if you start withdrawing the funds before you reach age 59 1/2.</p><p><b');
document.write('>Getting At The Cash, Avoiding The Pain</b><br>There are other options to get at your cash without getting penalized in ');
document.write('the process:</p><ol><li><p>Take the money as part of a series of substantially equal periodic payments over your estim');
document.write('ated lifespan or the joint lives of you and your designated beneficiary. These payments must be made at least annually, ');
document.write('and you base the payments on life expectancies from IRS tables. (See IRS Publication 939: General Rules for Pensions and');
document.write(' Annuities.) If payments are from a qualified employee plan, they must begin after you have left the job.</p><p>The pa');
document.write('yments must be made at least once each year until age 59 1/2, or for five years, whichever period is longer.</p></li><');
document.write('li><p>If you have extraordinary out-of-pocket medical expenses one year and your medical expenses exceed 7.5% of your ad');
document.write('justed gross income, you can withdraw funds to pay those expenses without paying a penalty. For example, if you had an a');
document.write('djusted gross income of $100,000 and medical expenses of $10,000, you could withdraw as much as $2,500 from your pension');
document.write(' or IRA without incurring the 10% penalty tax.</p></li><li><p>An IRA distribution for first-time home purchases also e');
document.write('scapes the penalty. You need to understand the government\'s definition of a &quot;first time&quot; homebuyer. In this ca');
document.write('se, it\'s defined as someone who hasn\'t owned a home for the last two years prior to the date of the new acquisition. You');
document.write(' could have owned five prior houses, but if you haven\'t owned one in at least two years, you qualify.</p><p>The &quot;');
document.write('date of acquisition&quot; is the day you sign the contract for purchase of an existing house or the day construction of ');
document.write('your new principal residence begins. The amount withdrawn for the purchase of a home must be used within 120 days of wit');
document.write('hdrawal and the maximum lifetime withdrawal exemption is $10,000.</p></li><li><p>Distributions for qualified higher ed');
document.write('ucational expenses also are exempt. Such expenses as tuition, room and board, fees, books, supplies and equipment requir');
document.write('ed for enrollment are all covered. So, too, are expenses for graduate courses. This exception applies to expenses incurr');
document.write('ed by you, your spouse, children and grandchildren.</p></li><li><p>IRA distributions made to unemployed individuals (u');
document.write('nemployed for more than 12 weeks) for health insurance premiums aren\'t subject to the 10% penalty tax.</p></li><li><p>');
document.write('If you receive a distribution due to &quot;separation from service&quot; (you\'re no longer at the job) in or after the y');
document.write('ear you reach age 55, you escape the penalty. This exception doesn\'t apply to distributions from IRAs or annuity or modi');
document.write('fied endowment contracts.</p></li><li>Distributions due to your death or due to total and permanent disability also av');
document.write('oid the 10% penalty tax. This is not a tax-planning strategy I personally advocate.</li></ol><p>Remember that the abov');
document.write('e techniques avoid the 10% penalty tax, but they don\'t avoid the regular income tax that\'s owed when you start withdrawi');
document.write('ng funds from your retirement plans. Unless your money is parked in a Roth IRA -- which is after-tax contributions -- yo');
document.write('u\'re going to pay a tax.</p><p>Distributions rolled over into another retirement plan or arrangement however, escape b');
document.write('oth the regular income tax and the 10% penalty tax. Such rollovers should be made directly between your brokers. That wa');
document.write('y, you even escape the 20% withholding required on distributions that you touch.</p>');