CaLabasHlEaf
Dryer sheet wannabe
- Joined
- Feb 23, 2016
- Messages
- 11
Hoping to Retire at 55 (72(t)(2)(A)(v) question)
Hi all. Lurking for a while. Lots of great info. Thanks!
I will be 55 next year and hoping to FIRE at that time.
Before doing so, I wanted to look into 72(t)(2)(A)(v) ("the age 55 rule").
I called Vanguard and what the Vanguard representative told me is inconsistent with my understanding It is my understanding that you can withdraw from a company 401k without having to pay the penalty if you retire from the company in the year that you turn 55. In other words, no penalty for early withdrawal of funds from the company 401k at 55, 56, etc. as long as you left the company in the year you turned 55 or thereafter. It is also my understanding that if you move those funds out of that 401k, e.g., into an IRA that this will not work, i.e., you will have to pay the penalty. The Vanguard representative told me that you must cash out the entire account at once or rollover the entire account into an IRA.
Has anyone done this (withdraw some funds from company 401k between ages 55 and 59.5 after retiring during year turned 55 or later)? If so, did you have any issues/problems. I am guessing that the person at Vanguard does not understand and that I will be able to withdraw a portion of the 401k as long as I fill out the correct tax forms.
Hi all. Lurking for a while. Lots of great info. Thanks!
I will be 55 next year and hoping to FIRE at that time.
Before doing so, I wanted to look into 72(t)(2)(A)(v) ("the age 55 rule").
I called Vanguard and what the Vanguard representative told me is inconsistent with my understanding It is my understanding that you can withdraw from a company 401k without having to pay the penalty if you retire from the company in the year that you turn 55. In other words, no penalty for early withdrawal of funds from the company 401k at 55, 56, etc. as long as you left the company in the year you turned 55 or thereafter. It is also my understanding that if you move those funds out of that 401k, e.g., into an IRA that this will not work, i.e., you will have to pay the penalty. The Vanguard representative told me that you must cash out the entire account at once or rollover the entire account into an IRA.
Has anyone done this (withdraw some funds from company 401k between ages 55 and 59.5 after retiring during year turned 55 or later)? If so, did you have any issues/problems. I am guessing that the person at Vanguard does not understand and that I will be able to withdraw a portion of the 401k as long as I fill out the correct tax forms.
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