I was laid off and am over 50. Can I take my 401k without the 10% penalty?

[NewGuy · Accepted solution]

The exception to the 10% penalty if you totally separate from service does not start until you reach age 55, unless you are a qualified public safety employee.  You can review all of the exceptions to the early withdrawal penalty at the below link.

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distri...

[mwsnyder]

Thank you, very helpful.  Since I am over 55 and was laid off, then I can take the distribution and not pay the penalty?

[NewGuy]

You can start taking distributions subject to the following from IRS Tax Topic 558:
Distributions made as part of a series of substantially equal periodic payments over your life expectancy or the life expectancies of you and your designated beneficiary. If these distributions are from a qualified plan other than an IRA, you must separate from service with this employer before the payments begin for this exception to apply.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/taxtopics/tc558.html">https://www.irs.gov/taxtopics/tc558.html</a>
Lump sum distributions would incur the penalty.