What Is the Rule of 55?
The rule of 55 is a US tax provision that lets workers who leave their job in or after the calendar year they turn 55 withdraw money from that employer’s 401(k) or 403(b) without the usual 10% early withdrawal penalty. Regular income tax still applies to the withdrawals.
Key Conditions
It applies only to the plan of the employer you leave, not to IRAs or plans from earlier jobs. For certain public safety employees, the age is 50.
Plan Rules
Employers’ plans must allow such withdrawals, and some limit how they can be taken.
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Last updated: September 29, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.