Individual retirement accounts include traditional IRAs, Roth IRAs, SIMPLE IRAs and SEP IRAs. Traditional and Roth IRAs are funded by the individual owner. SEP IRAs are funded by employers. SIMPLE IRAs are generally funded by employers and employees. Special tax rules apply to these accounts.
Definition These accounts are no longer called Education IRAs. Under S. 1190, the name was changed to Coverdell Education Savings Account (CESA) also called Education
Definition ERTA changed the laws to allow participants covered by employer-sponsored plans to make participant contributions to IRAs. Prior to ERTA, only individuals not covered
Definition Act signed into law by President George W. Bush on June 7, 2001, which made extensive changes to retirement plans. Changes made by EGTRRA
Definition A penalty that applies to certificates of deposit (CD)s ( or time deposits) from which withdrawals are made before the maturity date. The penalty
Definition Withdrawal that occurs from a certificate of deposit (CD) before the maturity date. An early withdrawal penalty is usually applied to CDs from which early withdrawals
Definition A condition under which the early distribution penalty is waived. Some exceptions apply to IRAs only, some apply to qualified plans , 457(b) and
Definition Distributions that occur before the retirement account owner reaches age 59 ½ are subject to an early distribution penalty (or excise tax) of 10%,
Referring Cite IRS § 72(t), Form 5329 and its instructions, IRS Publications 590 and 575 Additional Helpful Information The early distribution penalty applies to 457(b)
Definition Also referred to as a written separation agreement -Court issued document addressing the dissolution of a marriage or legal separation. The divorce decree will
Definition Amount paid from a retirement plan as a reportable transaction. A distribution can be processed as a direct rollover or paid to the participant.