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Exception to premature distribution rules

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Last Updated On
ByKeith James

L1: Exception to premature distribution rulesHello everyone,
I understand that 403B and 401k plans have an exception to the premature distribution rules rules, allowing an individual to take distributions directly from the 403b or 401k without penalty as early as 55 when they retire and had been a participant in the plan for 5 years.
Is this accurate? Has anyone had experience with the above?
Now if the above plan is rolled over to an IRA, then the exception is thrown out. Right?
I appreciate all input from you seasoned professionals!
Sincerely,
Keith James2005-08-08 20:12, By: Keith James, IP: [66.127.235.249]

L2: Exception to premature distribution rulesHello Keith:
You are correct on most counts. You must separate (quit) your employer in or after the year you attain age 55; you do not have to be 55 when you separate; assets must remain in the plan.
If you roll the assets to an IRA, this is exception is irrevocably lost.
Being in the plan for 5 or more years maybe be a plan rule but it is not a IRS rule.
TheBadger
wjstecker@wispertel.net
2005-08-08 20:22, By: TheBadger, IP: [66.250.23.21]

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