Key Takeaways. If you are 55 or older, you may be able to withdraw funds from your 401(k) or 403(b) without a tax penalty. Another option—if you retire before age 59 1/2—is the Substantially Equal Periodic Payment (SEPP) exemption, also known as an IRS Section 72(t) distribution.
Considering this, what is the rule of 55 for retirement?
The rule of 55 is an IRS guideline that allows you to avoid paying the 10% early withdrawal penalty on 401(k) and 403(b) retirement accounts if you leave your job during or after the calendar year you turn 55.
Moreover, can I start a pension at 55?
By now, in most cases early retirement (say at age 55) will be off the table, so you have around 20 years to build up a pension pot. By age 67 you will be eligible for the State Pension. On top of that, based on the same average assumptions, you can expect a workplace pension pot of £63,653.