Question

401K withdrawal separation from service

Forum|Forum|3 years ago
June 30, 2022
1 reply
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I left my previous employer at age 48, and have kept my 401K there with that employer. Now at age 58, I am interested in understanding whether I can withdrawal any portion of that 401K without tax penalty. Does the separation from service clause allow this withdrawal without penalty? Or would I have had to have been 55 at the time of separation? If it matters, my interest in withdrawing from that 401K is for college expenses for my two youngest children.

S

SweetieJean

Employee

You had to be age 55 at time of separation from service, and higher education expenses do not qualify for a 10% penalty exception either. However, you can roll the 401(k) into an IRA, and then take a distribution from that for that without penalty. But income taxes will still be due. See:

Retirement Topics Tax on Early Distributions | Internal Revenue Service (irs.gov)