Hunters with 401ks / 55 year Rule

[cajun]

Look at rule 72t

This is the other option for not paying the penalty on early withdrawals. However you have to take equal withdrawals for 5 years regardless if you are 55 or 58. If you take out more or less you pay back taxes and penalties.

 

[Deleted member 107796]

Wait, what? Is it 55 or is it 55 or older? So it could be 56, 57, 58 or 59 before 59 1/2?

It is anytime within the year you turn 55.

Correct me if I'm wrong but as long as you go a direct rollover into an outside 401k/Ira you are not penalized the 10%. The 10% is if you withdraw the $$. With a direct rollover you never actually receive the money so you are not penalized

No, you do not have to make a direct roller, to avoid the penalty, You will avoid taxes though, if you roll it over and pay it when you make disbursement at a later time.

Yes but if you withdraw any before 59 1/2 you will pay the penalty. So if you are retiring early and need to withdraw money it's better to leave it or some of it in the 401.

The rule is very clear, it is anytime within the year you turn 55. Many financial managers and plans have more confusing requirements as to disbursements and I have seen at least a few folks misguided as to the rule of 55 vs the requirements of their plans. I remember my stock broker friend sticking his nose in the air and saying, " I'm a stock broker and I should know of a rule like that!" He called the next day after doing his research and apologized. I didn't make him eat too much crow! As mentioned, I put this out here for only one reason... it is little known. cheers