Rule of 55 is it official?

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White Coat Investor
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Re: Rule of 55 is it official?

Post by White Coat Investor » Sun Jun 17, 2018 11:46 pm

tibbitts wrote:
Sat Jun 16, 2018 1:04 pm
White Coat Investor wrote:
Tue Jan 23, 2018 3:56 pm
anonsdca wrote:
Tue Jan 23, 2018 4:13 am
My understanding also. Retire at 55 and have a company 401K and keep that 401k with CO, you can withdraw Tax free--if you retire after 55. I am counting on this for me. I have:

1) Tax account--anytime -55
2) 401k - 55
3) IRA - 59.5
4) SSN - 62

So my retirement is based on this. Retiring abroad.
That makes me cry that you would base important decisions on your life on IRS rules that you don't seem to fully understand. There are so many exceptions to the age 59 1/2 rule (particularly SEPP) that it should not be sued to determine a retirement date in any way, shape, or form. Retire when you're ready to retire and don't sweat these "rules." They're easy to work around.
In my workplace this is the case because of pension rules, not IRS rules, but the results are the same and not easy to work around. You can, as you say, feel you "fully understand" both the rules and the statutes behind them, but people who've spent years studying them still don't agree on interpretation. As with the IRS it's not any one person's fault, it's due to overly complicated rules, and the overly complicated laws they're intended to implement. In the case of the pension, the process of determining benefits for each person is entirely manual, so people with the same exact work history can receive completely different benefits, depending on who reviews the record. And you won't know until well after you've made the irrevocable decision to retire. The differences can be dramatic - commonly tens, or even hundreds, of thousands of dollars, depending on the luck of the interpretation lottery. So the tendency is to work longer, and that's counter-productive for both the individual and the organization, but it's what many people do.
If you can't get your pension, you can't get your pension. But getting around the Age 59.5 rule is relatively easily.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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