Discussion:401K withdrawal at age 55
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Discussion Forum Index --> Tax Questions --> 401K withdrawal at age 55
| 24 September 2006 | |
| I've read that you can withdraw 401K funds without a penalty if you sever employment during the year you turn 55 or later. Does this mean anytime during the year? I turn 55 in Sept 09. Can I withdraw without a penalty if I sever anytime after Jan 1 of that year and am 54 yrs old?
Cheryl--32 years as an RN | |
Death&Taxes (talk|edits) said: | 25 September 2006 |
| Down the page a bit is 'Early distribution of 401k' where Wes and I come to opposite conclusions. I would suggest you would be best to play it safe by waiting until after you hit the magic date. | |
| 25 September 2006 | |
| IRS Publication 575 states that the 10% penalty exception applies to distributions from qualified plans after your separation from service in or after the year you reach age 55. My understanding is that you avoid the penalty as long as your separation from service is no earlier than the year you reach age 55. | |
| 25 September 2006 | |
| Hi, Scot1 the law is specific Sec. 72(t)(2)(A)(v) (DESPITE IRS pub 575) AFTER attainment age 55, dont take the risk. bye | |
Death&Taxes (talk|edits) said: | 25 September 2006 |
| Despite the publication and IRS Notice 87-13 1987-1 CB432, I agree with Wes and Dennis in the other thread running concurrently. Why take chances? In my opinion the notice tries to deal with the fact that a person born January 15 has such a larger window of opportunity than one born December 20 though it does not saw so. Then again, did any of us ever think tax administration is fair? | |
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