I turn 55 this year, I can now take 401K distributions without the 10% penalty. If I go back to work can I still get the 401K distribution without the 10% penalty?

[mzale33]

I turn 55 this year, and separated from service , so can now take 401K distributions without the 10% penalty. The question if I go back to work somewhere else can I still get the 401K distribution without the 10% taken out.

[DoninGA]

Yes, you can.  The distribution is from the 401(k) account you had with the former employer so there will not be a penalty from the account regardless if you go back to work with someone else.

[Opus 17]

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@DoninGA wrote:

Yes, you can.  The distribution is from the 401(k) account you had with the former employer so there will not be a penalty from the account regardless if you go back to work with someone else.

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It is important to note that if you were to rollover the account into an IRA, you lose the benefit of the age 55 rule, and the withdrawal age becomes 59-1/2.  IRAs and 401(k) are controlled by different sections of the law and some of the rules are different, even though the purpose of the account is similar.  You also don't want to rollover the account into the retirement plan of your new employer.