Do I Have To Wait Until Im 59 in order to make withdrawals from my 401k or IRA and avoid the tax penalty?
A. Surprisingly, The Answer Is No. Actually, there are several rather interesting ways to take early distributions from your 401k without incurring the 10% penalty. Two of these are discussed below, using excerpts from a 401khelpcenter.com article: http://www.401khelpcenter.com/401k_education/Early_Dist_Options.html * If you want to retire before age 59 and begin taking distributions from your 401K plan, you will generally be subject to a 10% early distribution penalty. The early distribution penalty is the cornerstone of the government’s campaign to discourage us from plundering our savings before our golden years. Luckily, there are a couple of ways to do this without paying the 10% penalty. Leaving Your Job On or After Age 55 There are two key points early retirees need to know. First, this exception applies if you leave your job at any time during the calendar year in which you turn 55, or later, according to IRS Publication 575. Second, you can only take money from the 401k plan o