401(k) participant is 55 or older. Can she take ….
Can she take a distribution out of her 401(k) without penalty?
we have a client that stated she was over 55 years of age and wanted to take a distrbution out of ther ex employee 401(k) . she has learned that she could do that without penalty since she is over 55 years of age.
Could you comment on that?
Permalink Submitted by Alan Spross on Wed, 2010-11-17 18:22
Yes, as long as she separated from service in the year of her 55th birthday or later, withdrawals directly from a qualified plan are penalty free. But if she were to roll the 401k over to an IRA, she would have to wait until 59.5 to avoid the early withdrawal penalty. Ref Pub 575, p 31. (Qualified public safety employees eligible at age 50).