Heidi Retired from GE (Her Employer) at Age 56

Heidi retired from GE (her employer) at age 56.At the end of the year,when she was 56 years of age,Heidi received a distribution from her GE sponsored 401(k) account.Because Heidi was not at least 59½ years of age at the time of the distribution,she must pay tax on the full amount of the distribution and a 10 percent penalty on the full amount of the distribution.The penalty is assessed on employees who receive distributions before they reach 59½ years of age or 55 years of age and have separated from service (retired) .