Ostroff, Fair and Company
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I am age 54 this year. If I begin collecting a monthly payment from my pension, will I have a penalty?


My company provides a fully paid old fashioned pension plan that can be paid out in lump sum or annuities. I will be getting an increasing joint survivor annuity payment that starts at $1600 per month and goes up 2% a year.

To make you feel better, I began collecting my pension at 52 ("several" years ago). No penalty. The 1099R (report of retirement plan income) comes with a code indicating that it meets the requirements for no penalty. If you use Turbo Tax, it figures this out for you.
The age you can take out and not get a penalty is 59 1/2.
Penalties are for IRA's and 401K's, not for company pension plans.
As long as you meet the age requirements (if any) associated with the pension program, all you have to pay are your regular taxes.
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