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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.
@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.
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.
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