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Generally, taxpayers can’t tap their retirement accounts penalty free before age 59 1/2. But like many rules, this one has an exception.
If you separate from service at the age of 55 or older, you can tap your former employer’s 401(k) free of the 10% early-withdrawal penalty. You will still owe taxes on the money if it’s withdrawn from a traditional 401(k). If you take out $20,000 at a 22% tax rate, for example, you’ll owe $4,400 in ordinary-income tax, but you
About | Kipplinger |
Kiplinger (pronounced KIP-ling-er) is a Washington, D.C.-based publisher of business forecasts and personal finance advice, available in print and online.
Our best-known publications are The Kiplinger Letter, a weekly business and economic forecasting periodical for people in management, and the monthly Kiplinger's Personal Finance magazine. The total paid circulation of our periodicals approaches 900,000. Our fast-growing Web site, Kiplinger.com, attracts 4.5 million unique visits and 30 million page views per month.