Disabled persons can take distributions from both 401(k) plans and IRAs without being subject to the early withdrawal penalty. A disabled individual, for this purpose, is one that is “unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration.”
The IRS requires proof of disability for this penalty exemption. Substantiating documentation from a physician should be obtained.
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