Posted on 01/28/2010 3:55:00 PM PST by pfflier
I am 59 years old. (People who know me are truly amazed I made it this far). Anyway, I've been all over the internet trying to find out...when exactly am I am 59 1/2 years old.
I know that is the magic number for tapping into the 401(k) and IRA without having to pay a penalty for early withdrawal.
The simplest guess would be the six month anniversary of my birthday. Does the IRS consider that the day? Or could it be just six months after my birth month? Could it be the 180th calendar day after my birthday? Or the 180th day of the year?
I work in the financial services industry and have had to answer this question for clients. I have been told that it is the day after the 6th month anniversary of your birthday. Not the day of. So if you were born 1/1, you could withdrawal 7/2 without the 10% penalty. Be sure to inquire if your employer 401(k) allows for in-service withdrawals if you are still employed with the company who’s sponsoring the 401(k)you want to withdrawal from. I also heard that if you retire from the company maintaining your 401(k) and you keep the funds at the 401(k), then you can make withdrawals after age 55 without the penalty...and this is separate from a 72T.
Call you local Social Security Admin....seriously, I found them to be very helpful - probably because they are overstaffed and need the work.
Worth a try!!
Thanks!
Also - any good broker should have that answer. I think I talked to Schwab about when I needed to start - and they send me a statement every year on how much I have to withdraw.
This is what I'm doing.
Good question. Glad you asked it. Been wondering about that myself.
O.K., I’m a dumb ass, and shouldn’t be giving advise, but that has never stopped me before.
1. Call you investment manager at the firm that is managing your funds. He/She can tell you to the hour of when you can withdraw.
2. Next suggestion. Don’t do this!! You are gonna pay a penalty that is painful!! Your account manager will also tell you this.
3. Wait until you are seventy to begin to withdraw.
4. Withdraw no more than 4% annually from your account, and you should never deplete it.
This information is provided by a person who is working to get his IQ into double digits.
WKL815, could you post this same response with a real birthday so people have a good example of what your talking about. 1/1 is well nobody was born on 1/1 try it with 4/27 or 10/05 so it’s clearer, 1/1 is the first of the month and makes it confusing to I bet many people reading this post.
Thanks, and great job on the reply, not dissing it, just helping others to understand more clearly.
Thanks.
If your 59th birthday is before 6/30 your can withdraw, otherwise wait till next year. Or as the man said...wait till you are 70 1/2 and hopefully in a lower tax bracket since almost all of you 401(k) is taxable at your current rate. Why give the b-*tards any more than you have to.
But the government changes rules so often, I'd check with a professional. I had no 401K at the time, I had retired from nuring to be a full time goat hearder. Hubby retired at 51, took a buy out from Ameritec and invested it in an IRA. Don't know if that helps you or not, but certainly check with a pro. on what you can and can not do...
Consider how your funds are set up.
I have an IRA that is an annuity. Although I am now eligible to withdraw, I haven’t started. The reason: it is paying a better ‘mandatory’ rate than current CD’s.
When I set it up fifteen years ago, it had a minimum mandated rate of 4.5%. Currently, even the best CD’s are paying only about 2%.
Since I don’t ‘need’ the funds to live on at present, I am just letting it ride.
I don’t HAVE to begin withdrawing until age 72, IIRC. That is still a few years away.
Turn 59 on Sept 5th, could withdrawal without the 10% penalty March 6th. 6 calendar months, plus a day.
See, on your six month birthday anniversary, you ARE 59 1/2 and the regulation is no penalty OVER 59 1/2, so you withdrawing on the day of your half year birthday anniversary won’t meet the OVER requirement. Stupid tedious IRS.
Also, so much of all the other stuff people replied is so wrong. I answered only the question you asked and didn’t assume any other details. Be careful.
Interestingly, I have asked tax professionals, my broker and FR. They have all given me different answers. In the case of a wrong answer, I could pay a significant penalty.
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