Talk:401(k)

I don't think Rule 72(t) SEPPs can be taken from a 401(k). For example, retirementthink.com states

"Also, 401k or other employer plans do not allow 72(t) distributions. A 72(t) distribution has to be taken from an IRA."

Of course, if you quit working you can roll your 401(k) over into an IRA, from which you can take 72(t) SEPPs. - Ken Schwartz 19:30, 18 June 2008 (EDT)
 * IRS Publication 575 talks about "Distributions made as part of a series of substantially equal periodic payments..." to avoid the 10% penalty, but 72(t) does indeed seem to be the incorrect terminology in this case, as it's never mentioned there. --CyberBob 20:28, 18 June 2008 (EDT)

Actually, I think I've changed my mind. IRS documentation is hard to read, but I don't see anything in Pub 575 which prohibits SEPPs from 401(k)'s. [I believe 72(t) distributions and SEPPs are synonymous, but I could be wrong.] Various websites seem to disagree with each other. For example, this page from 401khelpcenter states that 72(t) SEPPs can be taken from 401(k)'s. Sites which go into gory detail regarding 72(t) methods seem to discuss IRAs only. My hunch now is that SEPPs from 401(k)'s may be legal, but obtaining employer cooperation is problematic. Since one has presumably terminated employment anyway, it's easier to do a rollover into an IRA. - Ken Schwartz 22:08, 18 June 2008 (EDT)