Hello All - 55 and ready to Retire now!

[MJN7]

Hi People.
I'm 55, my wife is 51, we have two kids in college (Junior, Freshman), and we live in California. I'd like to retire ASAP. I'm confident we have college taken care of. We have appx $1.1 mil, split evenly between IRA and 401k.
We plan to sell our house and buy for cash (in AZ), so no mortgage.

Our two main concerns are:

- I have read I can draw from my 401k after I leave work at 55, penalty-free. Are there any limitations beyond that?

- Obtaining medical/dental/vision insurance. Would prefer Hi deductible/Low premium, similar to the HSA I currently have at work. How best to shop these plans?

Thanks for any help - looking forward to reading and contributing here.

[Brett_Cameron]

Quote:

Originally Posted by MJN7 Hi People. - I have read I can draw from my 401k after I leave work at 55, penalty-free. Are there any limitations beyond that? .

Check your 401k Summary Plan Description. The law allows withdrawals without penalty but your plan may not allow it or may place limitations on withdrawals.

[travelover]

Many, if not most here don't find dental and vision plans to be a good value. For health care, you could check at heathsherpa.com to find exchanges, or check with a local insurance agent that also handles health care policies.

[growing_older]

Quote:

I have read I can draw from my 401k after I leave work at 55, penalty-free. Are there any limitations beyond that?

This works ONLY if you plan allows it and you separate from service at age 55 or older. If you ER at 53 then the option is no longer available to you, even if the plan allows it. If you ER at 53, when you turn 55 you will not be covered by the retire at 55 provision on your 401k, because you retired BEFORE 55. You can always fall back on 72t if needed.

[Katsmeow]

Many 401k plans put real limitations on how people can withdraw when retired, if retiring after 59 1/2. For example, DH retired at 62. He could either make one lump sum withdrawal (not happening because it would all be taxable) or withdraw a set amount each year. We didn't want that lack of flexibility so he rolled it all to an IRA.

[gauss]

Quote:

Originally Posted by MJN7 Our two main concerns are: - I have read I can draw from my 401k after I leave work at 55, penalty-free. Are there any limitations beyond that?

I'm probably stating the obvious here, but your distributions will continue to be subject to Federal and possibly State Income tax.

-gauss

[MJN7]

Thanks for the replies everyone. So it seems I need to check with my employer about "separation from service" withdrawals from my 401k. I'm looking to do this just until I'm 59 1/2, which would be about 3 1/2 years. I'd like to be able to make one penalty-free withdrawal each year for 3 1/2 years.

[CUinFl]

Take a peek at 72t as well. That may be an alternative


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[flyingaway]

Do you have a pension?

[NanoSour]

May I suggest you roll your company 401K over to a Vanguard traditional IRA once you retire. Enjoy the simplicity and low cost of a 3-Fund Portfolio. Any monies you withdraw for college expenses (tuition, fees, books, room and board) is exempt from the 10% early withdrawal penalty.

[MRG]

Quote:

Originally Posted by gauss I'm probably stating the obvious here, but your distributions will continue to be subject to Federal and possibly State Income tax. -gauss

Good point. I'm in the OPs desired situation, retired at 56 and have liberal withdrawal ability. To gauss' s point 20% is withheld from the distributions I've taken. IIRC that is part of the IRS regs on distributions.

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