What is the rule of 55 for 401ks?

The rule of 55 is an IRS policy that allows workers to take early withdrawals from their employer-sponsored retirement accounts, such as 401 (k)s and 403 (b)s, at age 55 or older without paying a 10% penalty provided that they leave their jobs. 1 It only applies to accounts you have with your current employer.

What is the earliest age you can withdraw from a 401k?

In some circumstances, you can take withdrawals from your 401 (k) plan as early as age 55 without suffering penalties. If you want to withdrawal funds out of an old 401 (k) associated with an employer for which you no longer work, you can do this thanks to the Rule of 55.

Are there any exceptions to the age 55 rule for 401k withdrawals?

There are often penalties attached to taking early withdrawals from retirement accounts, but there are also some exceptions. One exception to the 401 (k) early withdrawal penalty is known as the rule of 55, and it can allow you to take distributions from your 401 (k) or 403 (b) without having to pay a penalty. Be at least age 55 or older.