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I am 67 yrs old and recently laid off due to budget cuts and i want to know if i am exempt from penalties if i withdraw my entire 401k account

 
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I am 67 yrs old and recently laid off due to budget cuts and i want to know if i am exempt from penalties if i withdraw my entire 401k account

There is no penalty once you are over age 59 1/2 regardless of the reason for the distribution.   You are still liable for any tax on the distribution though but not any additional penalty for  early withdrawal.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

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I am 67 yrs old and recently laid off due to budget cuts and i want to know if i am exempt from penalties if i withdraw my entire 401k account

There is no penalty once you are over age 59 1/2 regardless of the reason for the distribution.   You are still liable for any tax on the distribution though but not any additional penalty for  early withdrawal.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

I am 67 yrs old and recently laid off due to budget cuts and i want to know if i am exempt from penalties if i withdraw my entire 401k account

A wiser move is to roll the entire amount from the 401K to an IRA and then take distributions as needed so you can spread the tax liability over more than one tax year.

I am 67 yrs old and recently laid off due to budget cuts and i want to know if i am exempt from penalties if i withdraw my entire 401k account

Just a note:  Age 55 if laid off, not 59.5.

I am 67 yrs old and recently laid off due to budget cuts and i want to know if i am exempt from penalties if i withdraw my entire 401k account

SweetieJean do you know if there is a one time exemption for people age 55 or older for withdrawing from the 401k?

I am 67 yrs old and recently laid off due to budget cuts and i want to know if i am exempt from penalties if i withdraw my entire 401k account

Only if you left that employment at age 55 or more.

I am 67 yrs old and recently laid off due to budget cuts and i want to know if i am exempt from penalties if i withdraw my entire 401k account

I am 67 yrs old and recently laid off due to budget cuts and i want to know if i am exempt from penalties if i withdraw my entire 401k account

And it's only an exception to the 10% early withdrawal penalty.  You are over 59 1/2 so there is no penalty at all.  Any 401K withdrawal is 100% taxable (unless it is a ROTH 401k) and will add to your other income so it might push you into a higher tax bracket.  Be careful.

I am 67 yrs old and recently laid off due to budget cuts and i want to know if i am exempt from penalties if i withdraw my entire 401k account

VolvoGirl thank you... I didn't realize about the higher taxes bracket

I am 67 yrs old and recently laid off due to budget cuts and i want to know if i am exempt from penalties if i withdraw my entire 401k account

Any increase in income can sometimes also lower certain deductions and credits, and make more of your Social Security benefits taxable..
<a rel="nofollow" target="_blank" href="http://fairmark.com/general-taxation/reference-room/2016-tax-rate-schedules/">http://fairmark.com/ge...>

I am 67 yrs old and recently laid off due to budget cuts and i want to know if i am exempt from penalties if i withdraw my entire 401k account

Thus  my warning to roll the distribution to an IRA and withdraw as needed to contain the damage. Think before you do because it can cost you dearly.
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