what is magic about the age of 55 to be able to withdrawl tax free from your 401k penalty free if you left your job? Why cant you leave your job at 45 and then at 55 take out your money? What difference does it make the year you are no longer getting income?
penalty free not tax free.. I am all about giving what is owed to the Feds
Anonymous
They figured that a 55 year old may have more difficulty finding new employment until retirement age than a 45 year old would. The separation would pose more of a financial hardship on them, so they didn't want to penalize.
Not sure why that age was the one selected; could probably have been 50 as well. But it is the one your elected officials decided upon. If you don't agree, they love to hear from their constituents and the good ones actually listen and might take some action.
PMack
The normal age is 59 1/2 but there are exceptions once you hit 55 - see the link below.
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401k Age 55