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Old 05-19-2011, 09:25 AM   #21
Thinks s/he gets paid by the post
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Originally Posted by dseaney View Post

DW has 403b, anyone know for sure if age 55 rule is same for 403b?
from........403(b)wise : 403(b) FAQs

When can 403(b) money be accessed without penalty?
Generally, penalty-free distribution from a 403(b) cannot occur until the participant:

Reaches age 59 1/2

Separates from service in the year turning 55 (and must be retired)

Retire before age 55 eligible for Substantially Equal Periodic Payments (SEPP). Participants who have retired early (before age 55), but want access to their 403(b) without penalty can do so using SEPP. This provision requires that you take a series of substantially equal periodic payments. The key is that once you start these payments they must continue for five years or until you reach 59 1/2, whichever takes longer. If you start at age 58 you must continue until you are 63 (minimum 5 years).

Becomes disabled (as defined in section 72(m)(7) of the Internal Revenue Code)

Through a loan (some investment companies allow this, some do not)


Consulting a tax professional before accessing 403(b) money is highly recommended.

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Old 05-19-2011, 03:39 PM   #22
Full time employment: Posting here.
Join Date: Dec 2010
Posts: 746
Originally Posted by kaneohe View Post
Interesting......didn't know that either. Here's something from retireearly site
that agrees:

You can make penalty-free withdrawals from a 401(k) at age 55. You must wait until age 59 1/2 to make penalty-free withdrawals from an IRA. While this seems like a big break for a 55-year-old retiree, there are several things to consider; (1) Your employer must make it convenient for an ex-employee to make retirement withdrawals, many employers can't be bothered, (2) Rolling over your 401(k) funds to an IRA may increase the variety of investments available to you and lower your fees. If that's the case, the hassle of SEPP withdrawals from an IRA may be worth it.

Note: There is one fine point that many people miss in taking penalty-free withdrawals from a 401k at age 55. To do so, you must terminate your employment no earlier that the year in which you turn age 55. (See IRS Notice 87-13) If you retired at age 54 and waited until age 55 to make withdrawals from your 401k, you would not be able to make unlimited penalty-free withdrawals. You could only make penalty-free withdrawals by using SEPP.
You must retire in (or after) the calendar year in which you turned 55 - not necessarily be 55 at retirement. If you retired in January and turned 55 in December, you're home free.

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Old 07-11-2011, 08:37 PM   #23
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Join Date: Feb 2007
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Originally Posted by dancinmama View Post
The rule has been in effect for quite some time. DH is separating from his company at age 55 in early 2012. It is the magic age for the earliest you can receive a pension, the earliest you can retire and get retiree medical, and the earliest to be able to withdraw from your 401k without the 10% penalty so 55 it is.
Do you have to keep the 410K money right where it's at, or can you relocate to another 401K plan. Example relocate from TRowe to Wells Fargo?

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