Distribution Options

If you are retiring or leaving your job for any other reason, you have a big decision to make. What will you do with the money in your NADART retirement plan? Depending on your individual situation, you may have as many as six options to consider. These options have different tax and penalty implications that add complexity to your decision. You may want to consult a tax advisor before making a decision.

The chart below lists each of your distribution options and briefly discusses the tax consequences of, and any early withdrawal penalty associated with each. For more information about each of your options simply click on the option in the chart.

 

Option Withholding Penalty Current Taxes
Rollover to an Individual Retirement Account No mandatory 20% withholding for federal income tax Avoid 10% penalty for early withdrawal Postpones additional federal, state and local taxes, if applicable
Rollover to New Employer's Plan No mandatory 20% withholding for federal income tax Avoid 10% penalty for early withdrawal Postpones additional federal, state and local taxes, if applicable
Transfer to Individual NADART Account No mandatory 20% withholding for federal income tax for deferred accounts and most installment accounts, depending on schedule of distributions Avoid 10% penalty for early withdrawal for deferred accounts and most installment accounts, depending on schedule of distributions Postpones additional federal, state and local taxes, if applicable

If elected, distributions are subject to current tax
Annuity No mandatory 20% withholding for federal income tax Avoid 10% penalty for early withdrawal Postpones additional federal, state and local taxes, if applicable

Distributions are subject to current tax
Take All Your Savings in a Lump Sum Taxable amount subject to 20% withholding for federal income tax and possible state and local withholding 10% penalty for early withdrawal if under age 59½ May owe federal tax in excess of 20% and may also owe state and local taxes