 TITLE: What Is the Rule of 55? CONTENT: Can I Withdraw From My 401(k) at 55 Without a Penalty?\n------------------------------------------------------\nIf you leave your job at age 55 or older and want to access your 401(k) funds, the Rule of 55 allows you to do so without penalty. Whether you've been laid off, fired or simply quit doesn't matter—only the timing does. Per the IRS rule, you must leave your employer in the calendar year you turn 55 or later to get a penalty-free distribution. (The rule kicks in at age 50 for public safety workers, such as firefighters, air traffic controllers and police officers.) So, for example, if you lost your job before the eligible age, you would not be able to withdraw from that employer's 401(k) early; you'd need to wait until you turned 59½.\nIt's also important to remember that while you can avoid the 10% penalty, the rule doesn't free you from your IRS obligations. Distributions from your 401(k) are considered income and are subject to federal taxes. END