age 55 exception

L1: age 55 exceptionI retired at age 50 and took a lump sum rollover into a self managed IRA. The interest rates were so bad I couldn’t use a 72t at that time. I just paid the penalties and taxes to keep my options open till the rates increased. I turn 55 in 2006 and was wondering if the age 55 exception would apply to me since the lump sum was 5 years ago. Do I have to go back to work and then retire over again to avoid the penalty? I’ve done well in the market, so the penalty hasn’t hurt too bad, but it would be nice to not have to pay it. I’m still hesitant to lock in a 72t with rates rising, but look forward to a more steady income. Not paying the penalty would help enormously.2005-11-08 00:13, By: chuckles8888, IP: [69.149.179.120]
L2: age 55 exceptionThe age 55 rxception allplies when seperation from the employer’s service occurs on, or after, age 55. In addition, it applies to assets in employer sponsered retirement plans, not distributions from an IRA.
You can find the 72(t) exceptions at http://72t.net/Sepp/Irc72tExceptions.aspx
2005-11-08 07:37, By: Gfw, IP: [172.16.1.71]

L2: age 55 exceptionThe only age 55 exemption is when you cash out your 401(k) from your employer when you retire at 55. Regardless, you took it at 50 so the point is moot.
If you begin taking 72t in January (the year you turn 55), you’ll need to stay with it until you’re 60 (5 years).
If you can make it on the payouts (depending on your balance and which method you use), it sure beats paying 10% penalities. Never give Uncle Sam free money you worked hard for.2005-11-10 11:30, By: francis3, IP: [141.154.237.189]