How do I reduce my penalty from "withdrawing" from my retirement early?

[squireme02]

I changed employers and the retirement company stated since the amount was so small, they had to cash it out to me. I never electively withdrew from the account.

[macuser_22 · Accepted solution]

You could have rolled the money tax free into a Traditional IRA within 60 days of the distribution. The company should have notified you of your options.  If you took the money in cash and are under age 59 1/2 then the penalty applies.