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401K and 72t
Old 03-14-2006, 09:59 AM   #1
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401K and 72t

I've been searching the archives, but haven't found an answer to my question, which is this:

Thanks to this fourm, I know if you want to withdraw funds from an IRA before 59 1/2 without penalty, you have to follow the 72t rules.

However, if you withdraw funds from a 401K after you retire from the company sponsoring the 401K and are over 55 but less than 59 1/2, do the 72t rules apply or can you do penalty-free withdrawals in the same way you would if you were 59 1/2?

Thanks in advance.

TomZ
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Re: 401K and 72t
Old 03-14-2006, 10:07 AM   #2
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Re: 401K and 72t

AFAIK, you can pull money penalty free out of a 401k as long as you are over 55.
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Re: 401K and 72t
Old 03-14-2006, 01:57 PM   #3
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Re: 401K and 72t

Quote:
Originally Posted by brewer12345
AFAIK, you can pull money penalty free out of a 401k as long as you are over 55.
I think there is also a stipulation that you had to quit work in the place where you had your 401K during the year you turned 55.
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Re: 401K and 72t
Old 03-14-2006, 02:27 PM   #4
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Re: 401K and 72t

Thanks for the replies.* I called JP Morgan, who manages my 401K.* The customer service kid who answered said I could withdraw without penalty before 59 1/2 and it would be just like a regular withdrawal not a 72t.* I will be working at the company sponsoring the 401K when I hit 55.* He also told me that I should check with a tax advisor because there could be other circumstances where I would have to pay the penalty.* He said that 3 times.* I guess they have to be careful about how people interpret their answers to questions.* *
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Re: 401K and 72t
Old 03-14-2006, 06:20 PM   #5
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Re: 401K and 72t

It's after separation from service, in or after the year you reach 55. IRS Pub 575 lays it out.

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Re: 401K and 72t
Old 03-14-2006, 07:35 PM   #6
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Re: 401K and 72t

so can you withdraw from company sponsored 401K before you are 55 following 72t rules?
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Re: 401K and 72t
Old 03-14-2006, 07:43 PM   #7
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Re: 401K and 72t

Quote:
Originally Posted by Coach
It's after separation from service, in or after the year you reach 55. IRS Pub 575 lays it out.

Coach
Thanks.* I checked out Pub 575 and it lays things out in fairly understandable terms.
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