Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (9) | Ignore Thread Prev | Next
Author: TMFPixy Big gold star, 5000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 19220  
Subject: Re: Basic Questions Date: 11/8/2001 5:46 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 3
Janicedowden writes:

I understand that if you separate age 55 or over, you can withdraw from 401K without 10% penalty (as long as your 401K holder allows it).

But I thought that you lost that penalty protection if you rolled that 401K into an IRA, and if you withdrew from that IRA before 59-1/2, you would be hit with the 10% penalty.

Anyone out there for sure on this? Just want to clarify.


Be assured your understanding is correct and the original poster is mistaken. As long as the worker separates from the employer sponsoring the plan in the year that worker reaches or will reach age 55, then the worker may take money from that plan without penalty, but subject to the distribution rules in effect for that plan as specified in the plan document. However, if that worker moves that money to an IRA (comingled or not), then the plan money immediately becomes subject to IRA withdrawal rules, so the worker can't touch that money without penalty prior to age 59 1/2 unless one of the eight exceptions we discuss at http://www.fool.com/money/allaboutiras/allaboutiras01.htm applies.

Regards..Pixy
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (9) | Ignore Thread Prev | Next

Announcements

Post of the Day:
Value Hounds

Medallion Financial: TAXI!
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement