Shauna received a distribution from her 401(k)account in 2021. In which of the following situations will Shauna be subject to an early distribution penalty?
A)Shauna is 60 years of age but not yet retired when she receives the distribution.
B)Shauna is 58 years of age but not yet retired when she receives the distribution.
C)Shauna is 56 years of age and retired when she receives the distribution.
D)Shauna is 69 years of age but not yet retired when she receives the distribution.

Question

Quizplus · Accepted Answer

The early distribution penalty generally applies if the account holder is under age 59 1/2 at the time of distribution. Therefore, in option B, Shauna is subject to an early distribution penalty. In options A, C, and D, Shauna is either over the age of 59 1/2 or retired, which would exempt her from the penalty.

Shauna Received a Distribution from Her 401(k)account in 2021