Will you receive a 10% penalty if you use money from a QDRO prior to the age of 59 1/2?

I am receiving a lump sum of money from a QDRO and I would like to pay off some bills as a result of the divorce and repair my credit.

Will you receive a 10% penalty if you use money from a QDRO prior to the age of 59 1/2?

For QDRO, the recipient (you) pays all taxes %26amp; penalties. A qualified retirement plan such as an IRA, 401k, or an annuity, then yes you will pay the 10% penalty PLUS regular income tax on the amount withdrawn.

So for example: you withdraw $20k. Your IRS penalty is $2,000. And your tax is what ever your current tax rate (lets assume 25%) or $2500. One thing to watch out for though is if the withdrawal will put you in the next highest tax bracket. Because, anything that you take out, has not been taxed yet %26amp; will then be considered income. So it will look as if you made an extra $20k without paying taxes on it.

Will you receive a 10% penalty if you use money from a QDRO prior to the age of 59 1/2?

I think you might get at least 10-20% of the.............But im not sure....