Pixy said:In IRS Notice 87-13 the Infernal (sic) Revenue Service says the plan participant must separate from service during or after the year the employee attains age 55 to take plan money without penalty. Thus, what Fidelity told you is correct. This is true of 401k plans as well as 403b plans. To use this exception you must be on the job in the year you attain age 55. Otherwise the only way the early withdrawal penalty may be avoided is through an annuity payment like that established by SEPP. My plan was to retire well before 55 on non-sheltered investments. At 55 I was going to start drawing on my 403(b), but it looks like I either (1) have to rejoin the work force for long enough to roll my old 403(b) into a new one, then retire again, or (2) take loans until I can draw on either the 403(b) or the IRA, or (3) ... yuck ... roll everything into an IRA and try the 72t routine to age 59 1/2. These little details are annoying! Still, we have to follow the rules. Can anyone confirm whether the above options are okay with respect to the law?