Received Lump Sum Pension/Paid Off Mortgage

[taxmom34]

i keep forgetting about the age requirement. my bad. but sounds like this part of the tax law should be extended for the little guy who is retiring or nearing that point to give him a break with this choice

[erchess]

Public Policy through taxes

The reason for the penalty on premature distributions is based on the desire to cut down on the number of impecunious older folks who obviously have problems themselves and are a burden to society to the extent that they draw on public or private social assistance they would not qualify for if they had pensions. I would however question whether allowing people to do something and then swatting their hands is the best way to achieve this. Wouldn't it be better to simply limit the circumstances under which one can access a pension plan?

[Earl]

Have him take out a new mortgage on house for amount of taxes owed. He will still have a mortgage but much smaller and probably more manageable.

[taxea]

Have him take out a new mortgage on house for amount of taxes owed. He will still have a mortgage but much smaller and probably more manageable.

I think this is the best idea of all. I would hate to see a healthy 60 year old get a reverse mortgage. To me that is for someone not at all healthy, very old, one foot in grave and the other on a banana peel.

[Burke]

Isn't income averaging only for people born before 1936?

Yes, and that would make any eligible person at least 75+ years old now. Not too many of them left that haven't already broached this situation.