401K vs. 55

L1: 401K vs. 55Thank you for this most enlightening site. You are a god send to those of us stumbling around.
All the messages that I’ve read (except one) cite being 55 in the year one leaves work to be eligible to take 401k distributions without incurring the 10% penalty.
Should that actually be 55 or older, or is it for some reason exactly and only 55?
2004-06-03 18:51, By: Stillworking, IP: [208.142.129.202]

L2: 401K vs. 55The actual language is something close to “having attained the age of 55 or older in the year of separation.” Thus, one could be 54 when separation actually occurs but turns 55 before year’s end. Obviously 56, 57, 58 & 59 are fine as well.
TheBadger
wjstecker@wispertel.net
2004-06-03 19:38, By: TheBadger, IP: [66.250.23.21]

L2: 401K vs. 55This seems like a great place to explain the term, ‘attained age.’
This is a Congressionally created term and, along with almost anything Congress creates, a bit of a nightmare. The term is used with retirement plans of all types from K-plans to IRAs and company pensions, and has caused more confusion than almost anything I have seen.
If you will answer this simple question you will understand ‘attained age.’ The question is, ‘How old will you be on December 31 of any particular year?’ For example, if today, June 4, 2004, you are 69 years old but your birthday is October 10, then your ‘attained age’ for this year is 70. When the year ends on December 31st, 2004, you will be 70 years old.
The Badger has answered you question about age, but I want to add one more point. The age 55 rule applies to Qualified Retirement Plans (QRP). If you keep your QRP after retirement / separation and meet the age 55 rule, then you can take distributions without the 10% penalty. When you move funds from the QRP to an IRA, then the IRA rules apply and age 59 1/2 comes into play. However, you should find out if your plan will allow periodic distributions and then later allow you to do an IRA Rollover.
It may be to your advantage to Rollover part of the QRP to an IRA for growth, then use the QRP for 5 years till you are past age 59 1/2l. Whatever you do, be sure you understand what is happening.
Good luck.
Jim2004-06-04 08:33, By: Jim, IP: [68.225.115.136]

L2: 401K vs. 55I am confused
I took early retirement and am 53 but left my 401K with employer
In year I turn55can I take out any amount of $$without 10% penalty
(actually was thinking of going 72 t route this year)
2004-06-04 11:19, By: Kocch, IP: [68.82.191.120]

L2: 401K vs. 55Unfortunately, the answer is NO.One must have attained the age of 55 or higher in the year of separation from their employer; you were only 53.
TheBadger
wjstecker@wispertel.net
2004-06-04 11:25, By: TheBadger, IP: [66.250.23.21]