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Can I withdraw IRA $ at 59 1/2if I'm still working?
Old 12-15-2016, 06:02 AM   #1
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Can I withdraw IRA $ at 59 1/2if I'm still working?

Like the title says, can I withdraw money from my IRA's/401k if I'm over 59.5 but still working?

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Old 12-15-2016, 06:09 AM   #2
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From your IRA, yes. From your current employer's 401K, depends on the plan but some allow you to start withdrawing portions of it as you approach (or enter) retirement eligibility age -- nothing in the law prohibits it.

"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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Old 12-15-2016, 06:57 AM   #3
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You can withdraw from an IRA at any age. The question is whether you would pay a penalty along with the taxes or not.

Check the rules of your own 401(k) plan. They vary from company to company.

My spouse's 401(k) does not allow for in-service (still working) withdrawals at age 59.5, but does after age 62. My 401(k) allowed for in-service rollovers at age 59.5, so I could rollover to an IRA, then take penalty-free withdrawals from the iRA if I was that old.
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Old 12-15-2016, 01:29 PM   #4
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As others said, IRA, sure. 401K, depends. Just checked and my plan allows In-Service withdrawal, 1X per year, at any age. Tax implications of course.
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Old 12-15-2016, 03:20 PM   #5
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From IRA, sure, spend away after 59-1/2. As much as you want, as long as you pay income taxes on it.
"Old age is the most unexpected of all things that can happen to a man" -- Leon Trotsky
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Old 12-15-2016, 04:16 PM   #6
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Thanks for the replies. I was pretty sure you could but not certain.
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Old 12-15-2016, 08:26 PM   #7
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For the trad IRA do you have any after-tax basis in the account (ie non-deductible contributions) or rollovers from employer plans where there is a non-taxable amount included?

If so, you may wish to review form 8606 before taking the distribution from the trad IRA so that you understand what is involved to calculate the taxable amount of your distribution.

You wouldn't want to get blindsided by this when you are doing your taxes.

If all your trad IRA is taxable (ie 0 basis) then this will not apply - ie the full distribution will be taxable.

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Old 12-15-2016, 10:33 PM   #8
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Agree with the rest of the answers. My only caution is you will be paying top tax rate on that withdrawal if still working, it goes on top of your income, which means you are probably paying the same rate as what you were trying to avoid by doing pre-tax savings.

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