Your Tax Questions Answered
401 K Withdrawals
Kiplinger editorial director Kevin McCormally and fellow tax experts Peter Blank and Mary Beth Franklin tackle your most pressing tax challenges.
April 13, 2009
QUESTION: I am 55 and retired. Can I withdraw money from my former employers 401k plan penalty free? I may continue to work at a part time job.
KEVIN ANSWERS: It depends on how old you were when you left the job.
The age 55 rule applies if you are at least age 55 in the year you leave the job that has the 401(k) plan.
If you retired from the job at 54, for example, and are now 55, you're stuck with age 59 1/2 rule for avoiding 10% early withdrawal penalties. But if left he job last year and celebrated your 55th birthday last year (even if it was after you retired) then you can withdraw 401(k) funds without penalty.
It doesn't matter whether your continue to work.
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Reader Comments (2)
Posted by: tony cutright at 06/25/2010 04:30:31 PM
i would like to withdraw from a 401k but dont know how to go about it can you help me with this i havent paid in this for about 8 yrs is it still available to me
Posted by: bill at 07/01/2010 12:38:26 PM
can i roll my 401 into a cd without any penalty?