Question:   If I retire or leave my employer for any reason (including due to being laid off) before I am age 59 1/2, can I withdraw my vested benefits under that employer's 401(k) plan, without having to pay a 10% additional tax? What if I were 55 or older when I separated from service with my employer?

Answer:   

• Generally, unless an exception applies, a distribution of your benefits from a 401(k) plan before age 59 ½ is subject to the 10% additional tax on early distributions from retirement plans. See Publication 575, Pension and Annuity Income.

• However, there are special rules that apply to certain distributions that are made before you reach age 59 ½.  For example, a distribution of your entire benefit from a 401(k) plan that is made after separation from service and age 55 is not subject to the 10% tax.Tax Topic 412 and Tax Topic 558 are available for further guidance.