topic How do I avoid the 10% penalty using the rule of 55? in Retirement tax questions https://ttlc.intuit.com/community/retirement/discussion/how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1688308#M110601 Wed, 15 Jul 2020 19:02:47 GMT paulrirish 2020-07-15T19:02:47Z How do I avoid the 10% penalty using the rule of 55? https://ttlc.intuit.com/community/retirement/discussion/how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1688308#M110601 Wed, 15 Jul 2020 19:02:47 GMT https://ttlc.intuit.com/community/retirement/discussion/how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1688308#M110601 paulrirish 2020-07-15T19:02:47Z Re: How do I avoid the 10% penalty using the rule of 55? https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1688354#M110605 <P>You don't do anything.&nbsp; If you are over 55, you can get your pension.&nbsp; If this is an IRA, you pay the 10%</P><P>&nbsp;</P><P>I'm not looking over your shoulder, so I can only guess what 10% penalty you're talking about.</P><P>&nbsp;</P><P><A href="https://www.irs.gov/taxtopics/tc558" target="_blank">https://www.irs.gov/taxtopics/tc558</A></P> Wed, 15 Jul 2020 19:08:45 GMT https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1688354#M110605 chuck1234 2020-07-15T19:08:45Z Re: How do I avoid the 10% penalty using the rule of 55? https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1688500#M110619 <P>10% penalty for early withdrawal from 401(k)</P> Wed, 15 Jul 2020 19:26:57 GMT https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1688500#M110619 paulrirish 2020-07-15T19:26:57Z Re: How do I avoid the 10% penalty using the rule of 55? https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1688537#M110624 <P>In the 1099-R interview, after you enter the data off your form, you should be asked whether or not you qualify for one of the exceptions to the early distribution penalty.</P> <P>&nbsp;</P> <P>Yes, you do, and it's because you were separated from service after 55. Make sure to indicate that.</P> Wed, 15 Jul 2020 19:33:06 GMT https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1688537#M110624 BillM223 2020-07-15T19:33:06Z Re: How do I avoid the 10% penalty using the rule of 55? https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1693375#M110871 <P>To be clear, this exception only applies to a distribution from the qualified retirement plan of the employer from which you separated from service in or after the year you reached age 55, not to a distribution from a 401(k) provided by some other employer.</P> Thu, 16 Jul 2020 19:11:47 GMT https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1693375#M110871 dmertz 2020-07-16T19:11:47Z Re: How do I avoid the 10% penalty using the rule of 55? https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1931594#M127400 <P>I too would like to take advantage of the Rule of 55.&nbsp; I turn 55 in 2021 but plan to separate before my 55th birthday by my choice.&nbsp; I want to withdraw from my current employers 401k plan after the separation on a monthly basis until I'm 59 1/2.&nbsp; Does it matter how the employer lists me from separation as I am not a "qualified retiree" in the eyes of the employer since I do not have enough years of service + age.&nbsp; &nbsp;Am I still able to benefit and avoid the 10% penalty tax with the Rule of 55 or do I need to be a qualified retiree from my employer?</P> Tue, 16 Feb 2021 02:17:55 GMT https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1931594#M127400 dore7tvet 2021-02-16T02:17:55Z Re: How do I avoid the 10% penalty using the rule of 55? https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1931689#M127412 <P>According to&nbsp;<A href="https://www.irs.gov/taxtopics/tc558" target="_blank">IRS.gov</A>, the 10% early withdrawal penalty can be waived if&nbsp;distributions made to you after you separated from service with your employer i<STRONG>f the separation occurred in or after the year you reached age 55.&nbsp;</STRONG>If you retire in 2021, that penalty can be waived.</P><P>&nbsp;</P><P><SPAN style="font-size:11.0pt"><SPAN style="font-family:Calibri">[Edited 02-15-2021|06:40 PM&nbsp;PST]</SPAN></SPAN></P> Tue, 16 Feb 2021 02:40:45 GMT https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1931689#M127412 DaveF1006 2021-02-16T02:40:45Z
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topic How do I avoid the 10% penalty using the rule of 55? in Retirement tax questions
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How do I avoid the 10% penalty using the rule of 55?
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Re: How do I avoid the 10% penalty using the rule of 55?
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<P>You don't do anything.&nbsp; If you are over 55, you can get your pension.&nbsp; If this is an IRA, you pay the 10%</P><P>&nbsp;</P><P>I'm not looking over your shoulder, so I can only guess what 10% penalty you're talking about.</P><P>&nbsp;</P><P><A href="https://www.irs.gov/taxtopics/tc558" target="_blank">https://www.irs.gov/taxtopics/tc558</A></P>
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Re: How do I avoid the 10% penalty using the rule of 55?
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<P>10% penalty for early withdrawal from 401(k)</P>
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Re: How do I avoid the 10% penalty using the rule of 55?
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<P>In the 1099-R interview, after you enter the data off your form, you should be asked whether or not you qualify for one of the exceptions to the early distribution penalty.</P> <P>&nbsp;</P> <P>Yes, you do, and it's because you were separated from service after 55. Make sure to indicate that.</P>
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Re: How do I avoid the 10% penalty using the rule of 55?
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https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1693375#M110871
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<P>To be clear, this exception only applies to a distribution from the qualified retirement plan of the employer from which you separated from service in or after the year you reached age 55, not to a distribution from a 401(k) provided by some other employer.</P>
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Re: How do I avoid the 10% penalty using the rule of 55?
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<P>I too would like to take advantage of the Rule of 55.&nbsp; I turn 55 in 2021 but plan to separate before my 55th birthday by my choice.&nbsp; I want to withdraw from my current employers 401k plan after the separation on a monthly basis until I'm 59 1/2.&nbsp; Does it matter how the employer lists me from separation as I am not a "qualified retiree" in the eyes of the employer since I do not have enough years of service + age.&nbsp; &nbsp;Am I still able to benefit and avoid the 10% penalty tax with the Rule of 55 or do I need to be a qualified retiree from my employer?</P>
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Re: How do I avoid the 10% penalty using the rule of 55?
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https://ttlc.intuit.com/community/retirement/discussion/re-how-do-i-avoid-the-10-penalty-using-the-rule-of-55/01/1931689#M127412
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<P>According to&nbsp;<A href="https://www.irs.gov/taxtopics/tc558" target="_blank">IRS.gov</A>, the 10% early withdrawal penalty can be waived if&nbsp;distributions made to you after you separated from service with your employer i<STRONG>f the separation occurred in or after the year you reached age 55.&nbsp;</STRONG>If you retire in 2021, that penalty can be waived.</P><P>&nbsp;</P><P><SPAN style="font-size:11.0pt"><SPAN style="font-family:Calibri">[Edited 02-15-2021|06:40 PM&nbsp;PST]</SPAN></SPAN></P>
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