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Can You Withdraw From a Pension Without a Penalty?

Q: Can you withdraw funds from a pension before age 59 1/2 and avoid the early withdrawal penalty?

A: Yes, there are exceptions to the early withdrawal penalty for qualified retirement pension plans. The 10% additional tax does not apply to distributions that are:

  • Made as part of a series of substantially equal periodic payments (made at least annually) for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your designated beneficiary (if from a qualified retirement plan, the payments must begin after separation from service).


  • Made because you are totally and permanently disabled, or


  • Made on or after the death of the plan participant or contract holder, or


  • From a qualified retirement pension plan after your separation from service in or after the year you reached age 55.


You can find all the exceptions starting on page 28 in IRS Pub 575.

These questions are actual inquiries submitted by taxpayers to our AARP Tax-Aide Program. The AARP Tax-Aide Program is a volunteer-run, free tax-preparation and assistance program offered to low- and middle-income taxpayers with special attention to those age 60 and older. Our volunteers are trained and IRS-certified to understand individual federal-tax issues. Our volunteers provide tax assistance as a public service and cannot guarantee the accuracy of the information provided.


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