An exception to the rules lets you tap your account before you are 59½. By Kimberly Lankford, Contributing Editor February 19, 2007 I voluntarily retired from Cooper Standard Automotive last September at 55 years of age after 33 years of service. I kept an article by Mary Beth Franklin entitled "Cash Out Early" from September 2003 and am wondering if the information is still true. Can I now begin withdrawing money from my 401(k) without paying the 10% penalty? I understand I would pay tax on the amount withdrawn of course, but I believe I can take early withdrawals as long as I continue the payments for at least five years and until I reach 59#189;. Once I pass the five-year-and age-59#189; test, I can adjust the amount I withdraw going forward. Is this still true?You are referring to avoiding the 10% early withdrawal penalty by taking substantially equal distributions based on your life expectancy for at least five years or until you are 59#189; -- whichever is longer. In your case, that would be the five-year rule. However, you don't have to bother with what is known as a 72T distribution as described above. Because you were 55 when you retired, you can take advantage of another exception that allows penalty-free distributions from your 401(k) if you are 55 or older at the time you leave your job. That assumes your money is still in your 401(k) plan. The early-out does not apply to IRAs. Got a question? Ask Kim at firstname.lastname@example.org.