AboutScott DeMonte Expertise A notable expert in annuities, variable, fixed and equity index products, with an emphasis on variable annuity products. I can answer questions on living benefits, taxation of annuity proceeds, the risks and benefits of all annuity products. Also, with my vast experience as a financial adviser I can answer general investing questions. I will always give you the facts, good or bad.
Experience I have over 15 years experience as a financial adviser. I was also a Regional Vice President for 2 major insurance carriers, and own AnnuityIQ.com, an unbiased variable annuity rating and comparison site. A known expert in the inner workings of annuity products who has been quoted in Investment News, Consumer Reports, American Banker, Annuity Market News and other news outlets.
Question I am 58 years old, I am being laid off, I have read that at age 58 you can take your 401k without penalty other than being taxed is this true
Answer Hello Donna,
Yes it is true, but it is not as good as it sounds. You may do what is called a 72T, you will have to rollover the 401 k into an IRA first though. From there you will be able to take out money based on the 72T calculation.
Basically, the rate is pretty low because interest rates on Treasury notes and bonds are low. You must take the withdrawals for at least 5 years or 59 1/2, whichever is longer, and you would have to take it for 5 years. If you do not take it for 5 years then you will have to pay back any back penalties that you avoided by using this method.
Since you are so close to 59 1/2 you should speak with an advisor and discuss all of your options including taking out withdrawals without using 72T calculations. I hope this helps and feedback is much appreciated. Thanks Scott
