Free calculator · Early withdrawals
Rule of 55 calculator
Leave your job in or after the year you turn 55 and withdrawals from that employer’s 401(k) owe no 10% early withdrawal tax. Check whether it covers you and what a withdrawal leaves after tax.
Rule of 55, 2026: Applies.
Rule of 55, 2026AppliesYou left in the year you turned 55, at or past 55, so withdrawals from this plan owe no 10% additional tax. On $40,000 that saves $4,000. After income tax you keep $35,370.
| Withdrawal | $40,000 |
| Federal income tax it adds | -$4,630 |
| Florida tax it adds | -$0 |
| 10% additional tax | -$0 |
| Left to spend | $35,370 |
The plan withholds $8,000 for federal tax when it pays you directly. That is a payment toward the tax above, settled on your return.
Calculations, not tax, legal or investment advice.
What the rule of 55 covers
Withdrawals from a workplace plan before 59½ normally owe a 10% additional tax on top of income tax. Section 72(t)(2)(A)(v) exempts them when you leave the employer in or after the calendar year you turn 55. Income tax still applies.
- The 401(k), 403(b) or Thrift Savings Plan of the employer you left in or after the year you turned 55.
- Leaving for any reason counts: retiring, quitting, a layoff or being fired.
- Public safety employees of a state or local government, such as police, firefighters and EMS, qualify from the year they turn 50, or after 25 years of service under the plan.
What it does not cover
- IRAs, including a rollover IRA holding money from that plan. Roll it over and the exception is gone.
- A 401(k) from an earlier employer you left before the year you turned 55.
- Leaving at 54 and waiting until 55 to withdraw. The age that counts is the year you leave.
Check your plan before you count on it. Some plans only pay out the whole balance at once, which can push a large amount into one tax year. Taking part of it, or leaving it in the plan and drawing it down over several years, is up to the plan’s own rules.
Rule of 55 vs 72(t)
Both avoid the 10% additional tax before 59½. The rule of 55 is the simpler one when it applies. A 72(t) series works from an IRA at any age but locks you into equal payments.
| Question | Rule of 55 | 72(t) payments |
|---|---|---|
| Accounts | The plan of the job you left | Any IRA, or a plan after you leave |
| Earliest age | 55 in the year you leave (50 for public safety) | Any age |
| How much | Any amount, whenever the plan allows | A fixed yearly amount from an IRS method |
| How long | No commitment | Until the later of 5 years or 59½ |
| If you change course | Nothing to undo | The 10% comes back on every earlier payment, with interest |
Method and sources
The age test uses calendar years: the rule counts the year you turn 55 (50 for public safety employees), whatever the month you leave. Federal and state tax are the withdrawal calculator’s: the return computed with and without the withdrawal on top of your other income, with the 2026 tables. Anyone 61 or older at the end of 2026 is past 59½ for the whole year.
Tables and sources
- Rev. Proc. 2025-32§4.01 Tables 1 and 3; §4.14(1) and (3) · 2026 · www.irs.gov
- Schedule 1-A (Form 1040), Part V Enhanced Deduction for SeniorsSchedule 1-A Part V; IRC §151(d)(5)(C), effective 2025–2028 · 2026 · www.irs.gov
- Constitution of the State of FloridaArt. VII §5(a): no tax on the income of resident natural persons beyond the federal credit · 2026 · www.flsenate.gov
- 26 U.S.C. §72(t)§72(t)(1): 10% additional tax on the part of an early distribution included in gross income; (2)(A)(i): not on distributions made on or after age 59½; (2)(A)(v): not on distributions to an employee after separation from service after attainment of age 55; (3)(A): (2)(A)(v) does not apply to IRAs · 2026 · www.law.cornell.edu
- IRS Topic no. 558, Additional tax on early distributions from retirement plans other than IRAs10% of the part includible in gross income, before age 59½; exception for distributions after separation from service after attainment of age 55 · 2026 · www.irs.gov
- IRS Topic no. 557, Additional tax on early distributions from traditional and Roth IRAs10% additional tax on IRA distributions before age 59½ · 2026 · www.irs.gov
- IRS Publication 575, Pension and Annuity IncomeTax on Early Distributions: separation from service in or after the year you reach age 55 (age 50 for qualified public safety employees) · 2026 · www.irs.gov
72(t) calculatorUnder 55, or money in an IRA: the yearly payment under each IRS method that avoids the 10% tax.
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