Apr 10
8
IRS Age 55 Rule
In a previous post, we discussed IRS Rule 72t “equally substantial distribution” which allows for early withdraws from your retirement savings program like an IRA or 401k / 403b employer sponsored retirement savings plan. The 72t rule allows for these early withdraws (prior to age 59 ½ ) without the 10% penalty.
IRS age 55 rule is similar in that it allows for early withdraws on your 401k / 403b retirement savings plan without incurring the 10% penalty, however there some differences to this rule. With the IRS age 55 rule you have to turn 55 years of age in the year that you become separated from the employer who sponsored the 401k or 403b retirement savings plan. It does not matter when the 55th birthday or termination day land in the year as long as they both land in the same year.
The benefit to this rule over the IRS Rule 72t is that you are not required to continue the distribution from your 401k / 403b retirement savings plan for any specific length of time. We recommend you enlist the aid of a financial professional like a registered investment advisor reprehensive, registered investment reprehensive, life insurance advisor, CPA or other financial professional.
Please Contact Us if you have any questions about this or any topic on this site.
We provide service in the Southern CA. area in and around Orange County CA.
Your Life Advisors
Dean Barwick / Manager (714) 380-4586
