My wife’s employment was terminated in November of 2018, she turns 55 in June 2019. Does the rule 55 apply if she removes her $$ from the 401 k

[SweetieJean]

So she was age 54 when she separated from service?

[rs9738]

Yes

[TurtleAnna · Accepted solution]

If you're referring to the 10% penalty exception for separation of service at age 55, the answer is unfortunately, no.  See page 20 of this IRS publication.  Under the penalty exceptions it states:

"Made to an employee after separation from service if the separation occurred during or after the calendar year in which the employee reached age 55." 

https://www.irs.gov/pub/irs-pdf/p560.pdf

[SweetieJean]

Was she a Public Safety employee?  

[rs9738]

No private company.