Rule of 55: 401(k) Withdrawals After Leaving a Job at 55
The rule of 55 is an exception to the 10% additional tax on early withdrawals from an employer plan such as a 401(k). The IRS describes it as distributions made after you “separated from service with your employer” after attainment of age 55, in or after the year you turned 55, or in or after the year you turned 50 if you are a qualified public safety employee (or reached 25 years of service under the plan, if that comes first). It does not apply to an IRA, and income tax still applies to the taxable part of what you withdraw; see 26 U.S.C. 72(t)(2)(A)(v) and 72(t)(10).
Maintained by Archie Chang · Statute and IRS sources checked November 8, 2026 · Methodology & sources
General information. The main legal sources are quoted below from the statute and the IRS; the text around the quotes is explanation. Your own situation, including your plan’s rules on whether and how you can withdraw, can change the answer, so confirm with your plan administrator or a tax professional.
Do I qualify for the rule of 55?
Result
The age condition is met
You were 55 or older in the year you left, so the age condition of the exception is met. The 10% additional tax does not apply to those distributions; income tax still applies to the taxable part.
What this answer rests on
“made to an employee after separation from service after attainment of age 55,” 26 U.S.C. 72(t)(2)(A)(v)
“Most retirement plan distributions are subject to income tax and may be subject to an additional 10% tax. *” The * is the IRS footnote marker. IRS, Retirement topics: exceptions to tax on early distributions
This check compares your entries with the ages in the sources below. It does not cover non-governmental 457(b) plans. It is general information, not tax advice. Your plan decides whether and how you can take money out, so ask your plan administrator, and talk to a tax professional before you leave a job.
What the rule of 55 says
Section 72(t) adds a 10% tax to early distributions from a qualified retirement plan, and then lists distributions that are not subject to it. The tax is figured on the part of the distribution that is included in income:
“If any taxpayer receives any amount from a qualified retirement plan (as defined in section 4974(c)), the taxpayer’s tax under this chapter for the taxable year in which such amount is received shall be increased by an amount equal to 10 percent of the portion of such amount which is includible in gross income.”
One of the listed exceptions, which people call the rule of 55, is in paragraph (2)(A)(v):
“made to an employee after separation from service after attainment of age 55,”
The IRS describes the same exception this way:
“Separation from service | the employee separates from service during or after the year the employee reaches age 55 (age 50 for public safety employees of a state, or political subdivision of a state, in a governmental defined benefit or defined contribution plan) ** | yes | no | 72(t)(2)(A)(v),”
“Distributions made to you after you separated from service with your employer after attainment of age 55.”
The year you turn 55 is what counts
The statute says “after attainment of age 55”. The IRS explains it in terms of the year: you must have separated from service in or after the year you reach 55. Read that way, a last day in the calendar year of your 55th birthday can qualify even if the birthday comes later in that year.
“Separation from service. In order to meet the requirements for the first two exceptions in the list above, you must have separated from service in or after the year in which you reach age 55 (or the earlier of age 50 or with 25 years of service under the plan, whichever is earlier, for qualified public safety employees and private sector firefighters).”
Leaving earlier does not work, and waiting to withdraw does not fix it:
“You can’t separate from service before that year. Wait until you reach the applicable age, described above, and take a distribution.”
“Example. George separated from service from his employer at age 49. In the year he reached age 55, he took a distribution from his retirement plan. Because he separated from service before he reached age 55, he didn’t meet the requirements for the exception for a distribution made from a qualified retirement plan after separating from service in or after reaching age 55.”
Which accounts it covers
The IRS lists the exception for qualified plans such as a 401(k):
“The exceptions below apply to distributions from a qualified plan other than an IRA.”
The plan types it describes include:
“A qualified employee plan under section 401(a), such as a section 401(k) plan”
“A tax-sheltered annuity plan under section 403(b) for employees of public schools or tax-exempt organizations, or”
IRAs are excluded. The statute says so directly, and the IRS table shows “no” for IRAs on this exception. That includes an IRA you funded by rolling money out of a 401(k):
“Subparagraphs (A)(v) and (C) of paragraph (2) shall not apply to distributions from an individual retirement plan.”
Governmental 457(b) plans work differently, because the 10% tax mostly does not apply to them in the first place:
“Distributions from a governmental 457(b) plan are not subject to the 10% additional tax except for distributions attributable to rollovers from another type of plan or IRA.”
Your employer’s plan. The IRS describes the exception as a distribution after you separated from service with your employer. If you have an old plan from an earlier employer, ask a tax professional before assuming the exception covers it.
Age 50 for public safety employees and firefighters
Section 72(t)(10) changes the age for two groups:
“In the case of a distribution to a qualified public safety employee from a governmental plan (within the meaning of section 414(d)) or a distribution from a plan described in clause (iii), (iv), or (vi) of section 402(c)(8)(B) to an employee who provides firefighting services, paragraph (2)(A)(v) shall be applied by substituting “age 50 or 25 years of service under the plan, whichever is earlier” for “age 55”.”
The statute defines a qualified public safety employee in two parts:
“any employee of a State or political subdivision of a State who provides police protection, firefighting services, emergency medical services, or services as a corrections officer or as a forensic security employee providing for the care, custody, and control of forensic patients for any area within the jurisdiction of such State or political subdivision, or”
“any Federal law enforcement officer described in section 8331(20) or 8401(17) of title 5, United States Code, any Federal customs and border protection officer described in section 8331(31) or 8401(36) of such title, any Federal firefighter described in section 8331(21) or 8401(14) of such title, any air traffic controller described in 8331(30) or 8401(35) of such title, any nuclear materials courier described in section 8331(27) or 8401(33) of such title, any member of the United States Capitol Police, any member of the Supreme Court Police, or any diplomatic security special agent of the Department of State.”
The IRS puts it this way:
“Distributions made to a qualified public safety employee from a governmental plan (within in the meaning of section 414(d)) provided that the qualified public safety employee has separated from service during or after the year in which they attained age 50 or 25 years of service under the plan, whichever is earlier.”
“Distributions made from a plan described in clause (iii), (iv), or (vi) of section 402(c)(8)(B) to an employee who provides firefighting services and who separated from service in or after the year in which they attained age 50 or 25 years of service, whichever is earlier.”
“** Qualified public safety employees: The separation from service exception for public safety employees who are age 50 or over also includes specified federal law enforcement officers, corrections officers, customs and border protection officers, federal firefighters, private-sector firefighters, and air traffic controllers. An exemption is allowed for distributions from defined benefit plans, defined contribution plans or other types of governmental plans, such as the TSP. See IRC Section 72(t)(10). This exemption also applies to private-sector firefighters.”
You still owe income tax
The exception removes the 10% additional tax. It does not make the withdrawal tax-free:
“Most retirement plan distributions are subject to income tax and may be subject to an additional 10% tax. *”
Pre-tax 401(k) money you withdraw is part of your income for the year. To estimate that tax, use the 401(k) withdrawal tax calculator. If you need money for an emergency instead, the 401(k) hardship withdrawal page explains how those distributions are taxed, and for IRAs see the Roth IRA withdrawal rules.
Before you leave your job
- Ask your plan administrator whether the plan allows withdrawals after you leave, and in what form.
- Do not roll the money into an IRA if you want to use this exception, because the exception does not apply to IRAs.
- Compare your age with the year you plan to leave, not the day of your birthday.
- Plan for income tax on what you take out, and see what a balance may grow to with the 401k calculator.
Rule of 55 FAQ
What is the rule of 55?
It is a name for the separation-from-service exception to the 10% additional tax on early distributions, 26 U.S.C. 72(t)(2)(A)(v). The IRS describes it as an employee separating from service during or after the year the employee reaches age 55. It applies to employer plans such as a 401(k), not to IRAs.
Do I turn 55 before I leave, or only in the year I leave?
The IRS says you must have separated from service in or after the year in which you reach age 55. Turning 55 later in the same calendar year as your last day is enough under that wording. Leaving in an earlier year is not, and Publication 575 gives an example of someone who left at 49.
Does the rule of 55 apply to my IRA?
No. Section 72(t)(3)(A) says the separation-from-service exception does not apply to distributions from an individual retirement plan. If you roll the money from the plan into an IRA, it is no longer covered.
Do I still pay income tax on rule of 55 withdrawals?
Yes, the exception removes only the 10% additional tax. The IRS says most retirement plan distributions are subject to income tax, and the 10% tax is figured on the portion that is includible in gross income. Pre-tax money is still taxed as income.
Is the rule different for police officers and firefighters?
Yes. For qualified public safety employees in a governmental plan, and for employees who provide firefighting services under certain plans, section 72(t)(10) replaces age 55 with age 50 or 25 years of service under the plan, whichever is earlier.
Authoritative sources: 26 U.S.C. 72(t), quoted from the Office of the Law Revision Counsel release point Public Law 119-138 · IRS: Retirement topics, exceptions to tax on early distributions · IRS Topic no. 558: additional tax on early distributions from retirement plans other than IRAs · IRS Publication 575 (2025): Pension and Annuity Income