topic Re: Rule 55 in Retirement tax questions

Rule 55

alucas91607 — Wed, 11 Feb 2026 08:33:03 GMT

Hello,

I was laid off from my job in 2020 when I was 54. I have not contributed to my previous employer's 401k since. Would rule 55 apply to me if I took a distribution in 2023 after being laid off a second time from a different employer?

Thanks,

Re: Rule 55

DMarkM1 — Wed, 10 Apr 2024 14:00:41 GMT

Yes, the "Rule of 55" as an exception to the 10% early withdrawal penalty would apply to any distribution that happened after you reached age 55 from a qualified plan with a former employer. Here is an IRS topic with more information. The distribution is taxable income.

Re: Rule 55

dmertz — Wed, 10 Apr 2024 14:49:16 GMT

Being laid off by a different employer does not qualify you to use the age-55 exception for distributions from the 401(k) at the first employer.

Re: Rule 55

alucas91607 — Wed, 10 Apr 2024 14:58:25 GMT

Thanks for the reply dmertz.

Re: Rule 55

alucas91607 — Wed, 10 Apr 2024 14:59:20 GMT

Thanks for the reply DMarkM1