Rule of 55 401k Withdrawal Calculator
See whether the Rule of 55 lets you take 401k withdrawals without the 10% penalty after leaving your job at 55 or older.
Penalty, tax, and net-payout figures are worked out on your device — your 401(k) balance and tax details never leave the page.Try: Withdrawal amount=10000, Current age=55, Federal tax rate=22, State tax rate=0, Exemption=rule55, Expected annual return=7, Years left to grow=15 → $10,000, -$2,200, -$0, -$0, $7,800, $17,590
How to use
The Rule of 55 waives the 10% penalty for withdrawals from a former employer’s 401(k) if you leave that job in or after the year you turn 55. Income tax still applies, but the §72(t) penalty is gone. This tool pre-selects the Rule of 55 exemption so you can see the penalty-free result.
FAQ
What is the Rule of 55?
If you leave your employer in or after the year you turn 55, the IRS lets you take penalty-free withdrawals from that employer’s 401(k). The 10% penalty is waived, though income tax still applies.
Does the Rule of 55 work for IRAs?
No. The Rule of 55 applies to employer plans like a 401(k) or 403(b). IRA owners must generally wait until 59½ for penalty-free withdrawals.
Can I keep working somewhere else?
Yes. The rule looks at separation from the specific employer whose plan you are withdrawing from. You can take a new job and still use the Rule of 55 on the old plan.