Early withdrawal

Early withdrawal

Early Withdrawal

The withdrawal of funds from a fixed-income investment before the prescribed time. Early withdrawal may come from a certificate of deposit before its maturity. More often, however, it refers to a withdrawal from a retirement account before the appropriate age (usually 65 or the date of retirement, whichever is later). Early withdrawals are usually assessed a fee to discourage frequent or abusive use. As a result, early withdrawals usually occur when the account holder is in great financial need. An early withdrawal is also called an early distribution or a premature distribution.

Early withdrawal.

If you withdraw assets from a fixed-term investment, such as a certificate of deposit (CD), before it matures, it is considered an early withdrawal.

Similarly, if you withdraw from a tax-deferred or tax-free retirement savings plan before you turn 59 1/2, in most cases, it's considered early.

If you withdraw early, you usually have to pay a penalty imposed by the issuer (in the case of a CD) or the government (if it's an IRA or other tax-deferred or tax-free savings plan).

However, you may be able to use the money in your account without penalty under certain circumstances. For example, if you withdraw IRA assets to pay for higher education, to buy a first home, or for other qualified reasons, the penalty is waived. But taxes will still be due on the tax-deferred portion of the withdrawal.

References in periodicals archive ?
If a run occurred, the return on the priority account would exceed the return on a regular account, with or without early withdrawal from the latter.
As for his early withdrawal, Longstaff is optimistic it is nothing serious and he will be fit to continue his impressive form.
The UK Government can't say they weren't warned about the early withdrawal of troops from Afghanistan - and now the vile Taliban have their sights on Helmand province again.
M2 EQUITYBITES-December 10, 2015-CD early withdrawal penalties in effect at 89% of financial institutions
BANKING AND CREDIT NEWS-December 10, 2015-CD early withdrawal penalties in effect at 89% of financial institutions
Using tax data, we show that preretirement withdrawals increased between 2004 and 2010, especially after 2007, but early withdrawal rates are substantial (relative to new contributions) in all those years.
6 Will have better days with this effort capped off by an early withdrawal following a knock.
About one-fifth of those with a plan say they have either taken out a 401(k) loan or taken an early withdrawal from the plan in the past five years.
Among Gen X workers currently participating in a 401(k) or similar plan, the survey found that 27% have taken some form of loan and/or early withdrawal from their plan, including 18% who took a loan and at least a 10% early withdrawal.
You'll also have paid a hefty early withdrawal penalty.
With so much discussion about when the Fed will raise interest rates, many cooperatives that offer share certificates-what the credit union world calls CDs-are wondering how long they should lock in rates and looking closely (at policies related to early withdrawal penalties.
The Liverpool captain was not limping and showed no obvious signs of discomfort, but his early withdrawal will still be a cause for concern for Hodgson as he makes his final plans for Saturday's Group D opener in Manaus.

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