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Old 02-26-2016, 06:33 PM
 
Location: On the road
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Yep 4% rule count portfolio depletion as a win, if you're planted in the ground with one penny in your pocket it was successful. However the overwhelming majority of historical scenarios the average terminal portfolio value (30 years later) was significantly higher than at start of distribution phase.

Quote:
Originally Posted by mathjak107 View Post
not sure of the question . at what age are you starting to draw money ? you can take what you want starting at 59-1/2 with no penalty
Thread asked about 401k, min age for penalty free distribution on a 401k is 55. I wonder if anyone has every done the gimmicky routine of getting a job, moving money into the 401k, quitting the next day just so they could get to their money between 55 and 59.5 years old?

59-1/2 is for IRA
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Old 02-26-2016, 06:40 PM
 
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It isn't that simple. You can only get to your 401k money without penalty at 55 under normal situations if your company plan allows for periodic distributions and very few plans do. They do not want to basically manage your money like an annuity.

Your only alternative is to roll the money in to your ira but then the regular rules apply that always apply to ira's at 55 .
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Old 02-26-2016, 06:54 PM
 
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A 60/40 mix at 4% inflation adjustted has left a balance 30 years later , 90% of the time that was more then you started with. 67% of the time it left you with more then 2x what you started with.

If anything ,historically it left to much money on the tabe unspent.

But then you had 1907,1929,1937,1965-1966 which were the worst time frames in history and while the income stream held up there was little left in the bucket
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Old 02-27-2016, 12:13 AM
 
Location: On the road
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Quote:
Originally Posted by mathjak107 View Post
It isn't that simple. You can only get to your 401k money without penalty at 55 under normal situations if your company plan allows for periodic distributions and very few plans do.
Do you have any additional information on this? Like when you say "very few plans" what percentage of 401k plans can you withdraw from whenever you want at age 55?

It has always been my understanding that if you leave that employer at age 55+ then you can get to your money penalty free. Are you saying they will tell you sorry no withdrawals allowed ever again?
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Old 02-27-2016, 04:07 AM
 
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you can roll your money over when you leave from most plans at any age unless they have a clause. But the money is subject to regular ira rules. That is true at any age.

The 55 perk with no penalty only apply's to plans that offer periodic distributions sending you a set amount over years. Other wise if the plan does not allow for it the fact you are 55 means nothing to you.

As far as how much you get if it does ?It is plan specific not general rule. But as i said there are very few plans that have a periodic payment structure to them.

This gain access to your money at 55 from your 401k is one of those things that sound great but apply to very few .
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Old 02-27-2016, 04:09 AM
 
Location: Central Massachusetts
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Quote:
Originally Posted by lieqiang View Post
Do you have any additional information on this? Like when you say "very few plans" what percentage of 401k plans can you withdraw from whenever you want at age 55?

It has always been my understanding that if you leave that employer at age 55+ then you can get to your money penalty free. Are you saying they will tell you sorry no withdrawals allowed ever again?
I can tell you one that I know of and you have to meet certain criteria. First is you reach MRA (minimum retirement age). Second you have 30 years of federal service. This can be in combination with military and civilian service but that military service has to be repaid to the civilian service and paid for prior to retiring.
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Old 02-27-2016, 04:17 AM
 
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In the private sector they have far less strict rules. All you need to be is 55 and vested and have a plan that allows for it .

I left at 56 but we had no provisions for periodic payments so i had to just roll it in to my ira and it fell under ira rules. The fact i was 56 meant nothing .
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Old 02-27-2016, 04:25 AM
 
Location: Central Massachusetts
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But I think lieqiang is looking to take it in payments or in lump sum penalty free. Almost all of the 401k plans I know of can be rolled to new employer or an IRA. That is different then taking the money into hand.
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Old 02-27-2016, 04:34 AM
 
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The age 55 penalty free withdrawal he is asking about only apply's to 401k's that have provisions for that plan to pay out periodic payments and most plans do not. That refers to money in hand that can be spent penalty free.

Short of that he can roll his money over at any age to another plan or ira but the penalty free withdrawals no longer applys.

I don't believe he is asking about moving the money but he is asking about the penalty free withdrawals at 55 some plans allow with the payments being spent
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Old 02-27-2016, 04:41 AM
 
Location: Central Massachusetts
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Right exactly as I was thinking as well. Since I have not worked in the private sector in 30 years. Nor have I worked in the investment or insurance industry I will defer that to you. I only know of the plan I am involved in. It is restricted but folks that were born prior to say 1955 or some date I don't remember off hand got to be 55 but my age group is 56 and people born in 64 or after it is 57 or something like that. I admit my flaws and defer to people in a much better position to answer.

There are so many rules that can help and those that can restrict that folks need to know their plan well.
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