Rule 55
For the Rule of 55 that applies to penalty free withdrawals from 401ks…..In order to qualify, must the employee actually be 55 when they separate service? Or could they separate from service before age 55 as long as they will be turning age 55 later that same year of separation?
Thank you.
Permalink Submitted by Alan - IRA critic on Tue, 2024-04-02 16:43
The latter. If a participant will reach 55 late in 2024, the penalty free separation from service distribution can be taken in the same year, before or after actually reaching 55.