[Jamie]

ChooseFi episode 475 | How to access your retirement accounts before 59.5 | Sean Mullaney –
At around the 26 min mark Brad & Sean talk about “The Rule of 55”.

One question I had was – let’s say, hypothetically I went to work for a new employer between ages 53-55 but didn’t have enough money accumulated with that employer to utilize the rule of 55.

Could I roll all my old employers money (same account types of course) into the new employers retirement account & would this rollover money be considered “fair game” when taking the rule of 55?

Thanks in advance!

[Amy]

Yes. Any money in the current employer’s plan is eligible for Rule of 55 assuming the current employer’s plan supports Rule of 55.

[Chantel]

I’m not sure about that, but my company requires you to have worked there for 5 years in order to leave your money in their 401k after you separate from the company, so there are requirements like that to be aware of

[Kelly]

It’s my understanding that rollover money is not eligible for the rule of 55. If memory serves correct, you have to work at least 2 years at the employer before retiring and only the funds that were contributed through your employment at that employer were eligible for treatment under the rule of 55.

I recently switched from FT to PT with my employer to wind into retirement.

My plan is to stay part time until Jan 2026 or later, at which point I’m eligible under rule of 55.

[Jeff]

Depends on the plan if I remember correctly. Some don’t allow the rule of 55 at all even. Just because it’s legal doesn’t mean the plan supports it, just like a mega backdoor Roth.

[Lindsey]

This rule seems tricky as there are many external factors that you cannot plan on. What if you plan to work at employer until 55 but for some reason job is downsized, etc at in early 54?

Then no one wants to hire you at 54, so you just retire.

Then the whole plan is void? I believe there is a roth conversion that seems to be more predictable.

[Charlotte]

An alternative – could you spend the time from now until 55 contributing to a taxable brokerage account that you could use during the early retirement phase?

[Author]

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