Hunters with 401ks / 55 year Rule

CO_Guy

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Nov 16, 2018
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CO, USA
Hey all,
I am assuming that barefoot is as forum acceptable as red/OD grn socks, like a caveman long distance hunter.

I thought I'd flop this out there as many folks do not know that this rule exists and is a throwback to when I was a kid and 55 was generally the retirement age, As early as within the year you turn 55, you can cash out your 401k WITHOUT any penalty. The rule is simple... you must quit your current job and only have access to your current 401k, so you would want to roll up any secondary accounts into your current, if you want the entirety. Many accounts will have restrictions on what you can do after disbursement, but the federal rule still stands.

My thought is this, many of us put up with the roller coaster ride thru our lives, but when you need your funds, you need your funds. I could not imagine being say 65, another crash occurs and my only source of retirement funds will need 8-10 years to rebuild. Not for me. One last thing to note, there is no financial manager that will advocate/initiate this for you, as always, your decision should be your decision. cheers!
 

ShtrRdy

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Jan 14, 2012
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High Plains
I'm not quite sure what you're asking but I retired two years ago and had to do some shifting around so that I could get to my 401k funds when desired.
 

CO_Guy

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CO, USA
Not really asking anything but was just putting this little known rule out there. Have a great new year.
 

BW64

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Oct 10, 2017
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Location
Arizona
I guess they changed it. I had to wait until 59 1/2 to get mine. And please don't ask why this print is so vivid. When microsoft updates all things on this laptop go weird!!
 

cajun

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Dec 11, 2007
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504
It’s called the rule of 55. You have to retire or leave your job at 55 or older and you can withdraw from your company 401 k without paying the 10% penalty for not being 59 1/2. If you roll this money to an outside IRA you lose that provision. The money has to be in the 401k of your employer.
 

Kimber7man

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Hamilton County, Indiana
It’s called the rule of 55. You have to retire or leave your job at 55 or older and you can withdraw from your company 401 k without paying the 10% penalty for not being 59 1/2. If you roll this money to an outside IRA you lose that provision. The money has to be in the 401k of your employer.

Wait, what? Is it 55 or is it 55 or older? So it could be 56, 57, 58 or 59 before 59 1/2?
 

ARCaveman

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Oct 22, 2019
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Arkansas
In the words of Dave Ramsey retirement is a number not an age. When you have enough to live off your nest egg’s interest without using the principle.

Company match, ROTH IRA/401K, Traditional
 

cajun

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Dec 11, 2007
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504
You have to be 55 or older when you retire or separate from the company. For example I am 57 and will probably retire next year at 57 1/2 or 58. I will roll out most of my money from my 401 to an IRA but I will leave enough money in my 401 to make it past 59 1/2 and avoid the 10% penalty. I’m not sure how this would work if your company does not give you the option to leave your money in the 401 after you retire. We did not always have this option.
 

Kimber7man

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Hamilton County, Indiana
You have to be 55 or older when you retire or separate from the company. For example I am 57 and will probably retire next year at 57 1/2 or 58. I will roll out most of my money from my 401 to an IRA but I will leave enough money in my 401 to make it past 59 1/2 and avoid the 10% penalty. I’m not sure how this would work if your company does not give you the option to leave your money in the 401 after you retire. We did not always have this option.

Gotcha, I get it now.
 

ARCaveman

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Oct 22, 2019
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Location
Arkansas
Correct me if I’m wrong but as long as you go a direct rollover into an outside 401k/Ira you are not penalized the 10%. The 10% is if you withdraw the $$. With a direct rollover you never actually receive the money so you are not penalized
 

cajun

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Dec 11, 2007
Messages
504
Correct me if I’m wrong but as long as you go a direct rollover into an outside 401k/Ira you are not penalized the 10%. The 10% is if you withdraw the $$. With a direct rollover you never actually receive the money so you are not penalized
Yes but if you withdraw any before 59 1/2 you will pay the penalty. So if you are retiring early and need to withdraw money it’s better to leave it or some of it in the 401.
 
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