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Old 02-27-2016, 04:50 AM
 
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The rules in private sector are different in the sense that the 401k plans have the ability to include penalty free distributions that can be spent if you are no longer an in service employee.

But as nice as it sounds few plans want to get involved being an annuity. So unless they provide for it as plan policy, being 55 is basically a non event for you as the same rules apply just as they always do if you are under 59-1/2.

I always found it interesting how every thing in taxes is based on a half when it comes to age.

The reason it is 59-1/2 or 70-1/2 for rmds or 9 months for settling taxes on estates or 9 months after death for activating our disclaimer trusts is because the irs figures since it takes 9 months to enter life they give you 9 months to leave. They just made it easier to remember by rounding it off to 1/2 years for retirement money. But they kept everything else still at 9 months with other things
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Old 02-27-2016, 05:10 AM
 
Location: Central Massachusetts
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I was an early baby so I only get 8 months?
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Old 02-27-2016, 05:18 AM
 
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Nope same as someone late . 9 months is all you get ha ha
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Old 02-27-2016, 11:50 AM
 
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I looked into this quite a bit and yes, if your 401k allows periodic payments and you meet the other criteria you can start taking withdrawals at 55, but you are limited in the amount they will let you take. You can find out the amount you are allowed to withdraw by searching for 72(t) calculator. Here a link to one (not sure if they will let me post this link):


https://www.calcxml.com/calculators/72t


If you accidently take too much they penalize you on not only the overage amount, but every amount you have taken from the very beginning.
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Old 02-27-2016, 05:54 PM
 
Location: On the road
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Quote:
Originally Posted by mathjak107 View Post
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 .
You keep saying "very few" but I'm trying to figure out what percentage of 401k plans offer employees the option of partial distributions at age 55.
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Old 02-27-2016, 07:32 PM
 
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Partial distribution or periodic payments? I believe the statistic i once saw said 70% of plans do not allow for periodic payments at 55
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Old 02-28-2016, 12:02 PM
 
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Originally Posted by DaveinMtAiry View Post
I never knew the 4% rule meant 0 in 30 years. Damn pennyless at 97, now that would be a bad Monday.
It doesn't. It is one possible outcome. Some outcomes result in the portfolio being larger after 30 years than it was at the beginning. It really all comes down to sequence of returns.
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