You have accumulated $100,000 in a tax qualified plan. You are laid off from your job and decide to use these funds to pay off your mortgage. Which of the following statements best explains the tax effects of this decision?
a) This is not an allowed use of retirement plan assets.
b) You will owe income taxes on the full $100,000.
c) You will owe income taxes on the $100,000 plus a 10% penalty.
d) You will owe income taxes on the $100,000, plus a 10% penalty if you are less than age 59 ½.