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The Earliest Age You Can Withdraw Retirement Money Without Penalty

numbersQuick – what’s the earliest age you can withdraw money from a retirement account without paying a penalty? Is it 59½?

Well, if that was your answer, you are probably in the majority. That’s the general overall rule regarding withdrawal of IRA and 401(k) money. And definitely, you should be able to withdraw money from your account after that age without penalty (unless it’s in a 401(k), you’re still employed, and your plan restricts in-plan distributions). But this is much later than the real answer.

If your answer was 55, you’re in an elite group. You know about the age 55 provision that provides the ability to withdraw 401(k) funds without penalty if you’ve left employment at or after age 55. This is a good answer, but the real answer using this provision is age 54. This is because the rule specifically states that you can take withdrawals penalty-free from your plan if you leave employment “during the calendar year that you will reach age 55”. So, technically, if your birthday is in December, you could leave employment as early as January of that year (at age 54 and one month) and still be eligible for penalty-free withdrawals from your 401(k) plan (but not an IRA). This is still much later than the real answer.

So, looking at the age 55 paragraph, you might guess age 50 if you’re a public safety employee – which you would immediately adjust to age 49. This is an even younger (and clever) answer, but still not the earliest age.

The real answer is that this is a trick question. If you meet one of the exceptions noted in either the 401(k) withdrawal exceptions or the IRA withdrawal exceptions articles, you can take a withdrawal at ANY AGE without penalty, as long as you are an eligible participant in the retirement account. Technically there is no minimum age at which you could take a penalty-free withdrawal from your retirement plan!


  1. I actually just learned about the age 55 provision a few months ago. Originally I thought I was aiming for an early retirement at 59.5…but now I am bumping that up to 54. It won’t be easy, but I have about 20 years left to save and make possible.

    1. jblankenship says:

      Just keep in mind that some plans don’t allow a SOSEPP, only a one-time lump sum withdrawal. This could cause issues if you’re planning on having the money available to you from 55 to 59.5.

  2. dandan14 says:

    Yep — my answer was going to be there is no minimum if you follow the guidelines of Substantially Equal Periodic Payments. That’s my plan.

    1. jblankenship says:

      You’ve got it!

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