Common use of Premature Distributions Clause in Contracts

Premature Distributions. If you receive distributions from your IRA before you reach age 59 1/2, and you are not disabled, you will be subject to a 10% penalty tax in addition to the ordinary income taxes you must pay on the distribution. The 10% penalty tax will also apply to any portion or all of your account which is treated as having been distributed to you because you engaged in a prohibited transaction or pledged your account as security for a loan. Proper rollovers into another IRA and proper withdrawal of excess contributions are not considered premature distributions. The penalty will also not apply if distribution begins before age 59 1/2 and is made in a series of substantially equal payments (not less frequently than annually) over your life expectancy or your and your designated beneficiary's joint life expectancy, and you do not attempt to alter the payment arrangement before the later of five years after payments begin or when you reach age 59 1/2, unless you die or become disabled before this time.

Premature Distributions. If you receive distributions from your Regular IRA before you reach age 59 1/2, and you are not disabled, you will be subject to a 10% penalty tax in addition to the ordinary income taxes you must pay on the distribution. The 10% penalty tax will also apply to any portion or all of your account which is treated as having been distributed to you because you engaged in a prohibited transaction or pledged your account as security for a loan. Proper rollovers into another Regular IRA and proper withdrawal of excess contributions are not considered premature distributions. The penalty will also not apply if distribution begins before age 59 1/2 591/2 and is made in a series of substantially equal payments (not less frequently than annually) over your life expectancy or your and your designated beneficiary's joint life expectancy, and you do not attempt to alter the payment arrangement before the later of five years after payments begin or when you reach age 59 1/2, unless you die or become disabled before this time.