question.jpgIn Federal Income Tax

What are the tax consequences of cashing in my pension before retirement?

If you take a withdrawal before you are 59 1/2 , you may need to pay an additional 10% tax on early distributions, which applies to the part of the distribution in your gross income. It does not apply, however, to any part of the distribution that was tax free, such as amounts rolled over from an IRA or another retirement plan.