topic 401K withdrawal separation from service in Retirement tax questions

401K withdrawal separation from service

Stone Harbor — Tue, 10 Mar 2026 05:01:51 GMT

I left my previous employer at age 48, and have kept my 401K there with that employer. Now at age 58, I am interested in understanding whether I can withdrawal any portion of that 401K without tax penalty. Does the separation from service clause allow this withdrawal without penalty? Or would I have had to have been 55 at the time of separation? If it matters, my interest in withdrawing from that 401K is for college expenses for my two youngest children.

Re: 401K withdrawal separation from service

SweetieJean — Thu, 30 Jun 2022 19:57:19 GMT

You had to be age 55 at time of separation from service, and higher education expenses do not qualify for a 10% penalty exception either. However, you can roll the 401(k) into an IRA, and then take a distribution from that for that without penalty. But income taxes will still be due. See:

Retirement Topics Tax on Early Distributions | Internal Revenue Service (irs.gov)

Re: 401K withdrawal separation from service

Stone Harbor — Thu, 30 Jun 2022 21:25:40 GMT

Thank you for that @SweetieJean