I have total market value of 11,000.00 in a company pension that generates 5.8 percent interest.?

[vicky m]

I am fully vested in a cash account pension and can retire from my job at age 55 and have 17 years invested now and want to cash out my pension in a lump sum which is an option. How much will I receive? What taxes do I pay? I will be retiring in 2 months. I am not of age yet to retire for Social Security just from my job. This is not my only source of income so it is not funds to keep my life going. Its through Merrill Lynch.

[cactusgene]

No one on this forum has the correct answer to your question, because we do not know all the terms of your pension contract. This is a question you need to direct to the plan administrator of your pension plan. If you don't know how to contact him, then talk to your HR department and they can guide you further.

[mracquire]

Q: How much will I receive?
A: This is a question for your plan administrator. Some pension plans offer a choice of a lump sum distribution, a single life annuity (monthly payments for life), or some combination of the two. Your administrator can provide you with an estimate of your final benefit for all options.

Q: What taxes do I pay?
A: If you rollover your lump sum to a Rollover IRA (highly recommended), when you decide to start taking periodic distributions, you will pay federal income tax on those distributions for the tax year in which you receive them. You'll get a 1099-R and put the amounts on lines 15 or 16 of the 1040. So the amount you'll pay in taxes on the distributions is dependent on your tax bracket. It works just like other Traditional IRAs and annuities if you have them -- you don't have any tax liability until you start taking distributions. If you take the entire lump sum as a distribution when you retire instead of rolling it over, you'll owe taxes on the entire amount.

[Richard Anderson]

If you have a pretax deferred plan you can't cash out early prior to 59 1/2 without paying the tax and a 10% penalty to the IRS and state. If this money was paid after tax there is not tax or penalty. If all this money is in a defined company pension plan you pay tax on what you withdraw but no penalty. Find out exactly what you have before you do anything or you may set yourself up for a huge tax bill that might be avoided.

[Bobbie]

Just make sure that you do get this done correctly and that your do talk to the trustee of your retirement plan to make sure that you do every thing correctly for this purpose using the plans rule for that purpose at that time in your life.
Your marginal tax rate bracket amount during the 2014 tax filing season since you do say that you will be turning age 55 during the tax year 2013 for this purpose and time in your life.
Hope that you find the above enclosed information useful. 12/30/2012