Q. I am age 57 and plan to retire this year. Do I have to wait 2½ years to take 401(k) withdrawals? L.T., Little Egg Harbor, N.J.
A. No. The general rule says you must pay a 10% tax penalty, in addition to regular income tax, if you take the money before age 59½. However, there are several exceptions to the 10% penalty, including one for withdrawals taken by someone who “separates from service” and is at least 55 years old (as opposed to 59½). You apparently qualify for the age-55 exception.
Note: The age-55 exception to the 10% penalty is not available for early IRA withdrawals (before age 59½).