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#240545 - 09/02/04 02:23 PM Penalty on IRA W/D's, 59 1/2+
Mike Baker Offline
100 Club
Mike Baker
Joined: Dec 2002
Posts: 192
Tennessee
From what I have gathered, apparently there is no law which prohibits charging a penalty for early withdrawal from an IRA time deposit, even if the account holder is at least 59 1/2. I could see the justification in doing so if the depositor were withdrawing the funds in order to get a better interest rate [within the same bank, or elsewhere.] However, is anyone aware of the penalty being charged for normal distributions, from ages 59 1/2 up to the time that distributions are required...or even for required minimum distributions once the depositor reaches age 70 1/2? I think it would be bad enough to charge the penalty for a normal distribution, and especially so for a required minimum distribution. I think that whatever penalty income that might be realized would be more than overcome by bad customer relations. I am just curious what the practice is at other financial institutions for IRA withdrawals once the depositor reaches 59 1/2. Thank you in advance for sharing your thoughts and observations.
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#240546 - 09/02/04 02:46 PM Re: Penalty on IRA W/D's, 59 1/2+
Peepers Offline
10K Club
Joined: Jul 2002
Posts: 13,994
We waive the CD early withdrawal penalty for anyone over 59 Ĺ so long as itís taken as a distribution.

If they want a non-reportable withdrawal to transfer funds to another institution, we will charge the CD penalty and a $25 administration fee. We have a long disclosure signed at account opening explaining this.

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#240547 - 09/02/04 05:48 PM Re: Penalty on IRA W/D's, 59 1/2+
Tricia Offline
Gold Star
Joined: May 2004
Posts: 458
Smack dab in the middle of IL
Quote:

We waive the CD early withdrawal penalty for anyone over 59 Ĺ so long as itís taken as a distribution.

If they want a non-reportable withdrawal to transfer funds to another institution, we will charge the CD penalty and a $25 administration fee.




Ditto, except for the administration fee (we don't charge administration fees, although we probably should, nice non-interest income.)
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Life is the willingness to be yourself and live in harmony with others. - Dr. Cherie Carter-Scott

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