Pacun Posted May 27 Report Share Posted May 27 Tax payer will be 59 and a half years old on October 30, 2023. He withdrew $100K from his current employer 401k plan on January 2nd 2023. Will he have to pay $10K penalty on that withdrawal? He used that money for vacations. I think I have read that you have the whole calendar year when you are becoming 59.5 years old to withdraw without penalty but it doesn't sound right. Quote Link to comment Share on other sites More sharing options...
cbslee Posted May 27 Report Share Posted May 27 The wording is before the owner reaches 59 1/2 not the year in which the owner turns 59 1/2. 2 Quote Link to comment Share on other sites More sharing options...
Pacun Posted May 27 Author Report Share Posted May 27 My question would be a nice task for chatGPT since the rules have been here for a while. I will see if others reply to my post. Quote Link to comment Share on other sites More sharing options...
kathyc2 Posted May 27 Report Share Posted May 27 72(t)(2) clearly states: made on or after the date on which the employee attains age 59½ Since it was a 401K penalty can be avoided if separated from service at time of withdrawal. 1 Quote Link to comment Share on other sites More sharing options...
jklcpa Posted May 27 Report Share Posted May 27 Age 59 1/2 is 6 months after the taxpayer attains age 59. It was covered in this topic a few years ago. From the top of that topic, scroll down to see my first answer that has a link too. 2 1 Quote Link to comment Share on other sites More sharing options...
DANRVAN Posted May 27 Report Share Posted May 27 Penalty does not apply to distributions taken on or after the date taxpayer turns 59 1/2. See section 72(t)(1) 1 Quote Link to comment Share on other sites More sharing options...
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