Withdraw 401k at age 55 when Ieft employer. 10K of that money I rolled into IRA. 2 plus yrs - withdrew all IRA funds. I know I pay taxes. but do I pay a penalty?

The age 55 rule to be exempt from the 10% early distribution penalty is only from employer plans if you are separated from their service. 

Since you made a withdrawal from an IRA you must be age 59 1/2 or older to be exempt from the 10% early distribution penalty.

Unfortunately, by rolling over the money from a 401(k) into an IRA, you changed all the withdrawal rules and exceptions from the 401(k) rules to the IRA rules. You are subject to a 10% penalty if you withdraw before age 59 1/2, and the fact that you separated from your employer at age 55 is no longer part of the calculation.

Thanks.. But Covid doesn't come into play on this, since, it was during the covid 2020 distribution time.. The whole 66K was withdrawn during covid. April 2020, and was marked as Covid.  I know the 55 thing doesn't come into play, but how about the covid 10% penalty free, since its the same money.

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@robken1145 wrote:

Thanks.. But Covid doesn't come into play on this, since, it was during the covid 2020 distribution time.. The whole 66K was withdrawn during covid. April 2020, and was marked as Covid.  I know the 55 thing doesn't come into play, but how about the covid 10% penalty free, since its the same money.

 

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no, because a rollover is not a withdrawal.  If you withdrew the money from the 401k and stuffed it under your mattress in 2020, then it might be eligible for the penalty exception if you had a COVID hardship.  Because you rolled it over to an IRA, and then withdrew it in 2023, you follow the rules in effect for 2023.