Doesn’t the after 55 rule only count in the year in which you retired? ie, if you retire in January, you have an entire year to pull money out, but if you retire in December, you can pull out only until the end of the month. A large lump in December is no big deal, but it doesn’t allow for multiple year withdrawals from my understanding.

Hi Christina – I try to avoid questions that aren’t specifically asked. In this case if Michael was a government worker, he could take the withdrawals anytime after age 50. He didn’t specify, so I didn’t speculate. There are too many X factors to address every possibility.

Michael is 58 at the time of writing this, and he said he left his company “a few years ago” (didn’t specify at what age). If he left at age 55 or older, he could indeed take penalty-free withdrawals. However, if his date of separation was age 54, for example, wouldn’t he have to wait until age 59 1/2 to take penalty-free withdrawals? I believe that’s the case, and your answer needed to clarify that.

Hi Bob – Since you’re 48 I’d talk to a CPA about that. Also, you’ll have to get that cleared by your current plan trustee. This is one of those “measure twice, cut once” moments.

Hi Teresa – You’ve got a lot going on there, so I’d spend some time discussing it with a CPA. You should be able to transfer the pension into the 401k as long as the plan allows it. I don’t think that disability would affect your 72t distribution, but again, that’s a good question for a CPA.

Hi Rich – Yes, that’s exactly what it means. See the last item on this chart. Not only is the penalty waived at age 55 due to separation from service, but it can be as early as age 50 for public service workers.