Unless you qualify for a different penalty exception, you must have separated from service in the year you reach 55 or later for the penalty exception to apply.My employer allows access to 401k penalty free at 55. Does this rule apply only if I am retired or can I separate from employer and still access funds if I work part time somewhere else?
Your elective deferrals to the plan cannot be withdrawn until you reach 59.5 if you are still employed (except for hardship distributions if the plan offers them).
Once you are separated at 55 or later, your distributions are penalty free. However, the plan may only offer full distributions with no partial distributions, and that usually compromises the benefits of the penalty waiver.
Statistics: Posted by Alan S. — Mon Feb 05, 2024 11:44 am — Replies 2 — Views 231