Nonperiodic Distributions

Nonperiodic distributions are one-time, lump-sum payments that are made from an employee retirement plan. One thing you should know is that RMDs, systematic withdrawals, or IRA rollovers or transfers aren’t considered nonperiodic distributions.

You can withdraw money from your retirement funds before you reach retirement age, but keep in mind that if you take these withdrawals early, you’ll have to pay a tax penalty, and that’s probably not what you want. This measure was brought to life as a way to prevent employees from spending all their retirement funds before their actual retirement.

If you want to know more about tax withholding on periodic distributions, click on the next page to find out!