I am retiring at age 57. My spouse is age 64. If I roll my employer 401k to a traditional IRA, will we have to pay penalties if we start withdrawals immediately?

[Opus 17 · Accepted solution]

There is no "we."  An IRA is owned by a single owner.  If you are the owner, and you are under ager 59-1/2, you will pay the early withdrawal penalty.

However, there is no early withdrawal penalty if you have an employer-sponsored plan like a 401(k), if you are separated from service at age 55 or higher.  So, to avoid the 10% early withdrawal penalty, leave at least some of the money in your 401(k) and make your withdrawals from there until you turn 59-1/2.  (Of course, if the 401(k) has high fees or undesirable investment options, you will have to factor that in to your decision to roll over or not.)