The law says you can avoid the 10% penalty at any age by
"annuitizing" withdrawals for at least five years. If you
self-annuitize to have to take out around 3% each year
according to IRS expectancy tables.

I don't know if the 3% is a floor, which you could go
higher, say 10%, as long as you match or beat the floor for
five years. The best commercial annuity for my state pays
7.53% (age 55 single lifetime, no residual or term
immediateannuities.com).

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

lwpknp[at]yahoo.com (Larry) posted:

- quote -

Basically, the withdrawal policy is governed by your
company's 401K plan documents. So I would inquire with the
firm's HR Department, if I were you.

Many people choose to arrange a direct Trustee-to-Trustee
transfer of 401K funds to their own IRA, so they have direct
control and [frequently] greater flexibility of investment
options. In that case, withdrawals are penalty-free in the
year when you reach age 59 1/2.

Bill

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I plan on retiring at age 56 after working 30 years with my
present employer. I plan on using my 401K to help fund my
retirement. I understand that there is no penalty for
withdrawing this money as long as I am legally retired. Will
I still be eligible to withdraw money from my 401k if I
decide to work part time for my present employer.

Also can someone advise me on how to properly set up
withdrawals from my 401k.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >