Rule of 55 company is pending sale 401k will change record holder
My company is pending sale, I’d like to utilize the rule of 55 to commence distributions from my 401k but the new company is expected to move all employees into their 401k holding firm. Do I have to wait for this transition or can I leave the company after the closing and withdraw from the current (Empower) 401k? Do I need to stay with the company until the 401k transition then terminate?
Terry Says
The rule of 55 is an IRS policy that allows workers to take early withdrawals from their employer-sponsored retirement accounts, such as 401(k)s and 403(b)s, at age 55 or older without paying a 10% penalty provided that they leave their jobs. It’s called a 72t distribution.
I’m not sure this qualifies as “leaving your job” — just because the company is sold. Your plan custodian can let you know about that.
BUT WHY LEAVE YOUR JOB NOW??? Stick with it. We are entering a recession. You’ll be glad you have a job!
WHY USE UP YOUR RETIREMENT FUNDS NOW? Let them continue to grow in the new plan.
You are outsmarting yourself — bad move!!
