401k Withdrawal

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L1: 401k WithdrawalIf I have 30 years with Boeing and I am 55 , can I begin to withdraw my 401k without penalty ?????? There seems to be some confusion on this matter. Thank you 2009-09-25 11:56, By: Steev Isp, IP: []
L2: 401k WithdrawalNo confustion. The exemption is pretty clear.
Distributions made to you after
you separated from service with your employer, if the separation
occurred after you reached age 55 are penalty free.
Your age is determined as of 12/31 of the year that you seperate from service.
You need to check
with your Plan Administrator to determine whether the 401(k) plan allows withdrawals.2009-09-25 12:02, By: Gfw, IP: []

L3: 401k WithdrawalThe key is “separation from service”. If you are still working at Boeing, the answer is no. “In service” withdrawals would not qualify for the 10% exception. However, you might be able to “borrow” up to $ 50,000 “tax-free” so long as you repay it within 5 years. Once you terminate your employment, then you could take a distribution to repay the loan, and be exempt from the 10% penalty at that time.
In any case, DO NOT ROLL OVER your 401-K to an IRA.
Furthermore, check with your plan administrator for the “NUA Cost Basis” of the Boeing stock in your 401-K. Also, read up on this special tax-saving provision NOW so you do not screw things up when you do retire. J K Lasser YOUR INCOME TAX has a 2 page discussion about this special tax provision, how it works, and what you should and should not do. Check with a good tax professional for advice in this area.2009-09-25 15:44, By: dlzallestaxes, IP: []

L4: 401k WithdrawalAs indicated above, once you have separated and meet the age 55 requirement as attained at year end, there is no question about distributions directly from the plan being penalty free. Note that this exception is lost if the plan balance is rolled over to an IRA or another plan.
However, this penalty waiver may not be of practical benefit to you if the plan only offers lump sum distributions. While an LSD would be penalty free, if paid to you 20% would be lost to withholding and if you held out the amount you would need to live on until 59.5 and rolled over the rest, youmight inflate your marginal tax bracket by the 10% that you are saving on the penalty. So if the employer will not provide flexible distributions for you until 59.5, you may have to bite the bullet, do a direct rollover to an IRA, and then start a 72t plan from the IRA.
NUA options could still apply with an LSD, and can be incorporated into the above plan, but this gets extremely complex and professional assistance is strongly recommended.2009-09-25 22:38, By: Alan S., IP: []