The Rule of 55 – A Strategic Early Retirement Tool
For many individuals, the gap between early retirement and age 59½ presents a planning challenge. Retirement accounts are often the largest source of wealth—but accessing them too early typically triggers a 10% penalty.However, a lesser-known provision—the Rule of 55—creates a powerful exception. When used correctly, it can provide meaningful flexibility for early retirees, career changers, or those facing unexpected job transitions. What is the Rule of 55 The Rule of 55 allows individuals to take penalty-free (but not tax-free) withdrawals from certain employer-sponsored retirement plans if they separate from service in or after the calendar year they turn age 55. To…
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