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posted Nov 28, 2021 1:13:47 PM

If I retire from my current employer of 33 years using the Rule of 55, can I contract back to the same employer and still avoid the penalty on early withdrawals?

Wanted to use Rule of 55 to avoid paying penalty on drawing from a company sponsored retirement plan.  However, was thinking about going back as a contractor and did not know if that would cause problems with the Rule of 55.

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1 Replies
Level 15
Nov 28, 2021 2:39:11 PM

Working for the same company as an independent contractor while withdrawing your retirement consistent with the 55 rule does not affect the tax liability of those withdrawals.