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Sep 26 2011 12:00AM


I still have 401(k) funds with my former employer’s provider. I left that employer when I was 54. I am currently employed and have another 401(k) with my current employer and their provider. I am 56 years old. If I should leave my current employer now, would I be able to access the funds in both my 401(k)s without paying the 10 percent penalty?


“Since you are over age 55, you could access the money in your current 401(k) without penalty if you retire, quit or are fired,” said FPA member John Goddard, CFP®. “You need to wait until you are 59 1/2 to access the funds in your former employer's 401(k) without penalty since you left that employer when you were 54 (you need to be 55 or older when you leave a company in order to access the 401(k) without penalty).
“A strategy you could consider is rolling your former employer's 401(k) into your current employer's 401(k) before you retire. There are no penalties or tax implications to do a direct rollover from one 401(k) to another. Once all the money is in your current employer's 401(k), you could retire and you would have access to all the money without penalty.” 

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