Under 59 1/2
i am currently 58 years old and have a 401k. I am leaving this job very shortly and I heard that I could pull funds out of my 401k as needed with no penalty. Is that the case?
i am currently 58 years old and have a 401k. I am leaving this job very shortly and I heard that I could pull funds out of my 401k as needed with no penalty. Is that the case?
Permalink Submitted by Alan - IRA critic on Mon, 2020-04-06 19:18
Yes, you would qualify for the age 55+ separation exception to the penalty. Your 1099R would be coded 2 which means the penalty does not apply. However, you will still owe ordinary taxes, but if you qualify for a corona virus related distribution you could report the taxable income equally over 3 years if you wanted to. You would also be able to roll the distribution back within the next 3 years which would eliminate the tax bill.