If your client is taking withdrawals from qualified retirement plans prior to age 59 ½, you have an option to exclude the early distribution penalty of 10%.
By default, the early distribution penalty will be included in the calculations.
If your client is not subject to early distribution penalties due to an exception, you will want to turn off the early distribution penalty option to prevent the 10% excise tax.
In Silver Financial Planner, you will find the check box to exclude early withdrawal penalty tax on the Rates input section. The check box is labeled “Exempt withdrawals prior to age 60 from penalties on early distributions from qualified plans” – check this box only if the client is exempt from early distribution taxes:
For Easy Money and Golden Years users, in TOTAL Planning Suite, you will find the check box to exclude early withdrawal penalty tax in the Assumptions section, on the Retirement Assumptions tab. The check box is labeled “Calculate Penalty Tax on Pre-59.5 plan distributions” – uncheck this box only if the client is exempt from early distribution taxes:
