Age 55 questions

L1: Age 55 questionsI am planning on retiring from my company on 12/19/2008 and I will turn 55 on 12/24/2008. With this scenario what is my best option for taking funds out of my 403(b)(7) to avoid the 10% penalty ans still have maximum control over the amount thatI can elect to take out of my plan? I am confuused about the different interpretations I read here relative to the age 55 exclusion. Should I wait until after 12/24/2008 to separate from my company when I am actually age 55 (I really want out as soon as possible!)? Is the magic year “in the year you turn 55” or actually at age 55, but not yet age 56?? This board is great, so informative. Thanks!2007-11-08 09:32, By: freeatlast, IP: [64.80.112.150]
L2: Age 55 questionsThe age 55 exception applies when the separation is IN the year you turn 55 or later. Therefore, you will be eligible on January 1, 2008. There is no need to wait until year end if you wish to retire.
However, you need to determine what the plan allows relative to taking partial installment or other discretionery distributions for the next 5 years. Without the flexibility you need, you would have to make the transfer to an IRA and set up a 72t plan from the IRA or IRA account you designate for that purpose if less than your total IRA assets.
While not a major consideration, you should check to see if you have pre 1987 accruals in the plan. Amounts accounted for as pre 1987 accruals are not subject to RMDs until age 75, and this option will be lost once the funds are transferred to an IRA. Again, this is not likely to be a major consideration, but should at least be considered when planning distributions. 2007-11-08 10:01, By: Alan S., IP: [24.116.165.60]