<prompt> Human: Hello All,So for a little background, last year I changed jobs and took money out of previous employers Early Retirement Plan to pay off some debt to make certain changes due to the new job more affordable. When I took the money out it was allowed because I was no longer an employee of company that was contributing to the ERP, and I made sure they took Federal and state taxes out. Anyways today I had my taxes done, and i was told I was being penalized for my Early Disbursment to the tune of over 4000 for both state and federals. Well this doesnt seem right because I have already paid taxes on this money, so why am I being penalized by having to pay more taxes for this money? Also if it is because I am not 59.5 years old, does it still count as an early disbursement since the plan rules state it is available since I no longer work for that employer?Any thoughts or help would be greatly appreciated!!  <response>: The plan allows you to directly withdraw it since you are no longer employed by them. You would still be subject to early withdrawal penalties. 