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alaskarusss wrote:

Have a major impact question,
My 401K is on it's way to a nice return when I turn 59 1/2(35 now). I realize I could take money from 401K at 55, but the payments would be set forever? Sounds like inflation could hurt later on. Would like to reitre/work for myself prior to 55.

intercst replied:

You can withdraw any amount you want from a 401k (and stop the payments at any time) once you reach age 55.

Alaskaruss may be talking about a restriction imposed not by the IRS, but rather by his employer and/or the administrator of the 401(k).

When I retired at age 55 last year, my 401(k) was with Fidelity. The information pamphlet from my employer described the options available to me, including Installment Payments. I have marked what I think are significant restrictions in bold:

"If you are eligible for a distribution from the Savings Plan because you retired or became disabled, or if you are the beneficiary of a Savings Plan account, you can choose to receive your distribution in a series of monthly, quarterly, semiannual or annual installments... You can choose to receive payments over a 2- to 20-year period... Once you start receiving periodic payments, you cannot stop or change the form of payment, except to receive a full lump-sum distribution from your account."

Not quite "forever", but the apparent lack of flexibility made an impression on me, too!

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