Exception to the 59 1/2 rule from 401k
If a person has a company retirement plan, the company merges with another and the current plan is terminated. That person is between 55-59 ½ . They work for the new company. Can they make a distribution from the old 401k and avoid the 10% early w/d penalty?
Thanks,
Mike
Permalink Submitted by Alan - IRA critic on Sat, 2016-02-13 02:29
Probably not. This discussion makes sense even though “separation from service” as defined in RR 79-336 was relative to lump sum distributions. But 72t also uses the term “separation from service” so the general consensus lacking a more direct reference is that the definition also applies to 72t. They will probably have to separate from the successor company before 59.5 in order to qualify. http://benefitslink.com/boards/index.php/topic/57485-72t-age-55-exception/