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<blockquote data-quote="JohnnyPension" data-source="post: 254799" data-attributes="member: 7855"><p>Has anyone else looked into this whole age 59 1/2 thing. Normal thinking is if you withdraw before this you have to pay the 10 percent penalty. But...at IRS.GOV under "Distributions from 401k Plan" it says:</p><p></p><p>Tax on Early Distributions</p><p></p><p>Exceptions. The 10% tax will not apply if distributions before age 59½ are made in any of the following circumstances.</p><p></p><p></p><p></p><p><span style="color: DarkRed">Made to an employee after separation from service if the separation occurred during or after the calendar year in which the employee reached age 55.</span></p><p></p><p>When I retired I called up the IRS (on hold for about an hour) and was told that yes, when you are 55 and retire from your company there is NO 10 PERCENT PENALTY. The only tax you pay upfront is the mandatory 20 percent.</p><p></p><p>I have not taken this money out. I have taken my union annuity and UPS stock (both considered retirement funds in my case) and have not had to pay the penalty.</p><p></p><p>I would be interested to know if anyone has taken their 401k money before age 59 1/2.</p></blockquote><p></p>
[QUOTE="JohnnyPension, post: 254799, member: 7855"] Has anyone else looked into this whole age 59 1/2 thing. Normal thinking is if you withdraw before this you have to pay the 10 percent penalty. But...at IRS.GOV under "Distributions from 401k Plan" it says: Tax on Early Distributions Exceptions. The 10% tax will not apply if distributions before age 59½ are made in any of the following circumstances. [COLOR="DarkRed"]Made to an employee after separation from service if the separation occurred during or after the calendar year in which the employee reached age 55.[/COLOR] When I retired I called up the IRS (on hold for about an hour) and was told that yes, when you are 55 and retire from your company there is NO 10 PERCENT PENALTY. The only tax you pay upfront is the mandatory 20 percent. I have not taken this money out. I have taken my union annuity and UPS stock (both considered retirement funds in my case) and have not had to pay the penalty. I would be interested to know if anyone has taken their 401k money before age 59 1/2. [/QUOTE]
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