9 RULES OF THE RULE OF 55 -- How it works. #401k #403b #retirement #income

The rule of 55 is an IRS guideline that allows you to avoid paying the 10% early withdrawal penalty on 401k and 403b retirement accounts if you leave your job during or after the calendar year you turn 55. Learn everything you need to know about the Rule of 55 in 9 rules of its own.




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DISCLAIMER: The information provided in these emails is only to be considered helpful hints and education. Nothing said or shown in any of these emails is to be misconstrued as specific tax, legal or investment advice. Consult with your tax, legal or investment professional before acting on anything you see in these videos.

Rule of 55 for 401k and 403b. 401k and 403b only. Not for IRA and Roth IRA. Roth IRA and IRA will ruin Rule of 55 for 401k and 403b. Retiring early is possible but can only be used with current 401k and 403b accounts.

[tojun]

It’s not age 55, it’s the year in which you turn 55. If your birthday is in December, you can go in January while you’re still 54. Separation has to occur *in the year* in which you turn 55.

[YinusaSaheed]

I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for.

[IbrahimIsabella-]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got talking about investment and money. I started investing with $120k and in the first 2 months, my portfolio was reading $274, 800. Crazy right!, I decided to reinvest my profit and gets more interesting. For over a year we have been working together making consistent profit just bought my second home 2 weeks ago and care for my family.

[wvhillbilly]

Best video I've seen on this subject. Thank you.

[cavy]

It’s a one time withdrawal! And make sure your plan allows it!

[chrisw]

Great video. This 55 rule is confusing!! I worked for the USPS for 32 1/2 years and became disabled and was given disability retirement from them at 53. Last year right before I turned 56 I withdrew money from my 401k thinking that the 55 year rule applied to me. Can you to me if I do or this rule did apply to me so I won’t be penalized this year at tax time. Thanks

[TakeAHikeToday]

I was terminated of my 31 years of service at age 54 and 7 months. I have found new work and if I understand correctly I "cannot" take a withdrawal unless I move my old 401k to the new company and only if they allow?

[kishorek]

Good information!👏
If I wait till 59.5, would I be able pull from all previous 401K accounts independently and no penalties?. Of course pay taxes on withdrawals.
Assume I quit job and no longer working after 52.

[truckinforever]

So what happens if you are over 55 and your employer lays you off, and you start taking distibutions, then 5 months later your employer calls you back from lay off?

[Random-yqwu]

Traditional & Rollover IRA can be rolled into 401K(according to IRS Rollover chart). Rule of 55 should work once the money is inside ex-employer 401K plan.

[fennugreek-gszb]

That last rule seems pretty vital, namely that the plan allows it. Is it the employer's plan document or in the company managing the 401k? Will it say "Rule of 55" or are there other terms? I ask because I looked in my employer's plan documents but didn't find anything. I want to know if I'm missing this opportunity or just not asking the right questions.

[natebinthemix]

Ok so I've done everything you've mentioned. I separated from my employer in the year I turned 55. My 401k was with my current employer. I have since made withdrawals at 56 (I'm now 57) and my current age. Principal where my 401k is at keeps telling me I'm responsible for the 10% penalty as Im prior to 59 and a half. Are they getting this wrong? I keep explaining to them the Rule Of 55 I see on videos like yours. I get I have to pay taxes (Federal and State I imagine 20%) but again I have to believe I would qualify for the Rule Of 55 here. You mention to check with your plan? Are you saying not every 401k qualifies for the Rule Of 55? Thanks for any info!

[luisamador]

So if I retired at 48 yoa with a 401k tsp retirement account, now that I am 58 can I withdraw funds without the 10% penalty?

[bigtoeknee]

When using the rule of 55 can i withdraw any amount any time i need or does it need to be a fuxed periodic payments like 72T rule?

[bdtn]

What happens if you're terminated, laid off, or take an early retirement buy out package at 54 in the actual year you turn 55. Can you avoid the 10% penalty, or does this have to happen on or after the actual age of 55?

[BUDWEIZER]

I heard it has to be done while your 55. If your 56 or 57 then you have to pay the 10% penalty for withdrawal 🤔. Is this correct

[JasonZamajtuk]

I have a solo 401k can I use the rule of 55 when the time comes?

[MrMulto]

Can you take the entire amount out or do you have to make withdraws and stay in the plan until 59 and a 1/2?

[thejungs]

Does the rule of 55 apply to roth 401k? If so i can take distribution from Roth 401k free and clear of tax and penalty before 59.5?

[shortythefrenchie]

If I could qualify at 55 with all the rules, I can still take this tax-free withdrawal at 56 and so forth correct? I don’t have to take it at 55 meaning I can withdraw funds later if I meet the qualifications?