Rule of 55 Calculator

2026 rules

Check whether leaving your job lets you take 401(k) money without the 10% penalty, and what the withdrawal costs in tax.

Your numbers

Year you were born

Year you leave the job

Public safety employee in a governmental plan

Police, firefighters, EMS, air traffic controllers and others qualify from age 50 or 25 years of service.

Amount you plan to withdraw this year

Filing status

Other taxable income this year

Result

Rule of 55 appliesYes

Age in the year you leave55
Minimum age for this exception55
Withdrawal$40,000
Federal income tax on it-$5,150
10% additional tax$0
You keep (before state tax)$34,850
Penalty-free from2026 (this employer's plan only)

Only the plan of the employer you leave qualifies. Rolling it to an IRA first loses the exception.

How it works

If you leave your employer in or after the calendar year you turn 55, withdrawals from that employer's 401(k) or 403(b) are free of the 10% additional tax. Public safety workers in governmental plans qualify from 50, or after 25 years of service.

The rule covers only the plan of the job you leave. Money in an IRA, or in an old employer's plan you left before 55, still faces the penalty until 59½.

Income tax still applies. Spreading withdrawals across years keeps more of each one in a lower bracket.

2026 figures: IRS Publication 590-B, Appendix B; IRS Rev. Rul. 2026-19 (October 2026 AFRs); IRS Notice 2022-6 (72(t) payments).

Questions

Can I go back to work after using the rule of 55?

Yes. The exception depends on leaving that employer in the right year; a new job afterwards doesn't undo it.

Should I roll the 401(k) into an IRA when I leave?

Not if you want the rule of 55. An IRA doesn't have this exception, so keep the money in the plan until you're done with early withdrawals.