Be sure that you have a 401k. Many small businesses sponsor SEP or SIMPLE IRAs and the age 55 separation exception does not apply to IRAs.[Topic is now in Personal Finance (Not Investing) - mod mkc]
I’m planning on pulling the plug at 55.
Everything’s great, financials are all in check, zero debt, mortgage is paid off and we have 2X what we need.
I have worked at the same small dental office for 20 years. I turn 55 years old in 9 years, however the two doctors I work for are planning on retiring in 7 years and selling the office to another dentist.
Should this happen, would I still be able to pull from my 401k at 55 years + 1 day?
But if you have a qualified plan and you separate from service anytime in the year you reach 55 or later, you will qualify for the penalty exception. And if that hurdle is passed, note that the plan must also offer partial and preferably flexible distribution options. If the plan requires a total lump sum distribution, the advantage of the penalty waived is often erased by the higher marginal tax rate triggered by a total distribution.
Statistics: Posted by Alan S. — Fri Oct 04, 2024 9:01 pm — Replies 2 — Views 380