How to Withdraw Retirement Funds?

[saverspender]

A newbie here with a question on how to retire early.
I am 35 and my husband 38 with only a small networth as we made some unwise purchases in the previous years.
I used the Retire Early calculator and from what it reported, if we continued saving how we are saving right now, we can retire in about 10-11 years (long ways!).
By that time though we will only be in our early 50s.

So my question is, with 401K, it would only allow you to withdraw at 59.5. I donot contribute to IRA and Roth. Aside from real estate investments, we will not have any pensions either. How do we take/withdraw 4% from our 401Ks without penalty? I would not want to rely on my home value as well. Should we start on a ROTH? Any help appreciated.

[Austin_Explorer]

SaverSpender,

I believe that you can withdraw from 401k's at 55, but may be wrong.

In any event, once you leave your job you can roll over the 401k to a non-Roth IRA without penalty and then use a 72t distribution (substantially equal periodic payments) to get money out of the IRA, also without penalty. *Of course you'll pay income tax on the dsitributions, but no penaly on top. And you can really do this at any time, so long as you continue the SEPP schedule.

[sgeeeee]

Hi saverspender,

As AustinExplorer mentioned, you need to look into the 72t rules. You can always get at your money, but you have to follow some explicit rules:

http://www.retireearlyhomepage.com/wdraw59.html

[windedhare]

I believe that you can withdraw from 401k's at 55, but may be wrong.
.

At my company you can withdraw from 401K at 55 without penalty, if you retired from the company at that age. But say you leave the company before you turn 55, you would have to go the IRA/72t route to avoid the penalty.

[saverspender]

Thanks all for your help and the link.
Helped a lot in ER plans.

I just hope I stay in track.