Age 55 rule for 401(k) and 72t for LumpSum Pension
How can I assist a client who can take her Pension in Lump Sum, will be 55 in one month, needs to payoff debt, but needs income on a monthly basis? Can she use part of the 401(k) to pay debt and then turn around and combine the balance of the 401(k) and Pension and begin 72t payments? Need help?
Permalink Submitted by Alan Spross on Tue, 2012-07-10 16:43
Does she qualify for the age 55 separation from service penalty exception? If so, and if the plan will allow discretionery distributions then a 72t plan with it’s rigidity and risks can be avoided.