Generally speaking, anyone accessing a 401(k) prior to the age of 59 1/2 will be subject to a penalty in the amount of 10% of the taxable amount withdrawn. However, there are a number of exceptions to this penalty. Since you are separated from service with your employer and are over age 55, you qualify for an exception for withdrawals from the 401(k) established with your former employer only.
However, the distributions are not completely tax-free, you do have to pay income tax. Only the 10% tax penalty is bypassed in this case.
If you do find employment after starting to take distributions, you can continue taking distributions from that 401(k) plan provided it was the plan you were contributing to when you separated from your previous job. The one exception is that you may only do this if you have not rolled that 401(k) into another plan or an IRA.
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