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The IRS Collected More Than $5 Billion In 2011 From Penalties Incurred By Taxpayers Who Withdrew Money From Tax-Deferred Retirement Accounts

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The IRS collected more than $5 billion in 2011 from penalties incurred by taxpayers who withdrew money from tax-deferred retirement accounts before the age of 59 1/2. The people who pay the penalty include younger workers who switch jobs and don’t bother to roll over their accounts and older workers who believe they have no place else to turn.

The median size of a 401(k) is $24,400 as of March 31, with people older than 55 having $65,300, according to Fidelity Investments. Those funds can disappear quickly in retirement, and the early withdrawals indicate that the coming retirement crisis could be even more acute than expected.
According to a Gallup survey released May 2, 2014 48% of non retired Americans plan to rely on retirement accounts as a major source of income, up from 42% in 2009 though down from a high of 54 percent in 2008.

“We try to be employee-friendly and much of it is the employees’ money,” Callans said.
Cindy Cromie, World Health Organization worked with the Service staff International Union to reply to the outsourcing, is currently 57 and still out of work. She’s making an attempt to avoid sound her remaining pension plan, which might be subject to the penalty.

Read the full Story… at Bloomberg

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