There are exceptions to the early withdrawal penalty for qualified retirement pension plans. (The 10 percent additional tax does not apply to distributions that are). Here are four exceptions:

• 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.
• Made on or after the death of the plan participant or contract holder.
• Made 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 of IRS Publication 575.

Are there any tax consequences if you roll over your 401(k) into an IRA?

Tax-free rollovers from a qualified retirement plan to a traditional IRA can be accomplished two ways. The best solution is to arrange for a trustee-to-trustee transfer. In this manner, no amount will be withheld for income taxes and there is no tax liability. The next method is for you to receive a check for the amount to be rolled over and for you to deposit the gross amount of the distribution (the amount before tax withholding) into a traditional IRA. If you only roll over the net amount of the check after withheld taxes, then you will have taxable income for the amount withheld for taxes. Also, you must complete the rollover within 60 days or the total distribution may be taxable.

If the retiree is past age 70 1/2 and must take a minimum required distribution from the plan, the minimum distribution cannot be rolled over. You must first have the retirement plan issue the distribution and then have the plan administrator transfer the balance to your IRA account.