Retired BEFORE 55
Client’s son came to me thinking that he wanted to roll over his 401(k). Two years ago at age 53, he had to take an early retirement due to health problems. Now he’s thinking about a rollover. I know that if one retires AFTER age 55 the 10% penalty doesn’t apply on 401(k) withdrawals. Does the same rule apply after one turns 55 IF one retires before attaining age 55?
Permalink Submitted by Alan - IRA critic on Wed, 2013-05-22 19:45
No. The separation must be in the year he turns 55 or later for the penalty exception to apply. In this situation, you might consider doing the rollover and establishing a 72t plan from the IRA if taxpayer needs an income flow.