What is the term for the distribution of a participant's entire balance from qualified retirement plans within a tax year?

Lump-sum distribution refers to the withdrawal of an entire balance from a qualified retirement plan in a single payment within a tax year. This type of distribution is significant because it typically involves the complete liquidation of an individual's retirement account, allowing them to access all their retirement savings at once.

This method of distribution can have various tax implications, as the individual will be subject to income tax on the entire amount received. In some cases, early withdrawal penalties may also apply if the distribution occurs before the participant reaches age 59½, unless certain exceptions are met. Understanding this concept is crucial for managing retirement funds and preparing for the tax consequences that may arise from such a distribution.

The other choices represent different scenarios related to retirement distributions: early distributions usually involve taking funds out before the designated retirement age, partial distributions refer to withdrawing only a portion of the retirement account, and in-kind distributions involve transferring assets directly rather than cashing them out.