Shauna received a distribution from her 401(k)account this year. 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

According to IRS rules, if a person receives a distribution from their 401(k) account before the age of 59 and a half, they are subject to an early distribution penalty of 10%. Therefore, Shauna will be subject to an early distribution penalty since she is not yet 59 and a half in option B.

Shauna Received a Distribution from Her 401(k)account This Year