If an employee terminates service after 55 and wishes to take withdrawals from the 401k plan from the company he terminated from, is there anything which prohibits him from future employment with another company? i.e. a competitor? My client would like to resign from his current company(he is 56) and withdraw money from that 401k plan and avoid the 10% penalty. He would like to then begin work for a competitor. Can he do so without being penalized? Thanks.