26th November 2019

terrysavage
15

Can you draw from 401k at age 55?

There is an exception to that rule, however, which allows an employee who retires, quits or is fired at age 55 to withdraw without penalty from their 401k (the “rule of 55”). There are three key points early retirees need to know.

Similarly one may ask, what is the earliest age you can withdraw from a 401k without penalty?

When you leave your employer before age 55, the earliest you can access funds penalty-free will be age 59 ½. Once you start withdrawing, you can stop and start up until age 70 ½. Once you're 70 ½, you must withdraw a specific portion, the RMD, from your nest egg each year.

What is the rule of 55?

The IRS Rule of 55 allows an employee who is laid off, fired, or who quits a job between the ages of 55 and 59 1/2 to pull money out of his 401(k) or 403(b) plan without penalty.
Write Your Answer

Rate

80% people found this answer useful, click to cast your vote.

4 / 5 based on 1 vote.

Bookmark

Press Ctrl + D to add this site to your favorites!

Share