Rule 55
Hello,
For the Rule of 55 that applies to penalty free withdrawals from 401ks…..In order to qualify, must the employee actually be 55 when they separate service? Or could they separate from service before age 55 as long as they will be turning age 55 later that same year of separation?
Thank you.
Permalink Submitted by Alan - IRA critic on Thu, 2024-04-04 02:28
The latter. The penalty free distribution can be taken prior to the 55 birthday if in the same calendar year and after separation from service.