Question

Rule 55

Forum|Forum|2 years ago
April 10, 2024
2 replies
0 views

Hello,

I was laid off from my job in 2020 when I was 54. I have not contributed to my previous employer's 401k since. Would rule 55 apply to me if I took a distribution in 2023 after being laid off a second time from a different employer?

Thanks,

DMarkM1

Yes, the "Rule of 55" as an exception to the 10% early withdrawal penalty would apply to any distribution that happened after you reached age 55 from a qualified plan with a former employer. Here is an IRS topic with more information. The distribution is taxable income.

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