How To Terminate A Qualified Retirement Plan? 
Your retirement plan is your money whether you 're using an employer sponsored or individual plan . But there may be considerable consequences to consider when terminating your plan , especially before age 59 1/2 as the IRS imposes a 10 % penalty and ordinary income taxes . In the year of termination , the proceeds from your plan could very well increase your income a couple of tax brackets for that year . If you can wait until after age 59 1/2 and amortize your termination over a longer period , you may be able to keep more of your money . 