I will be 58 in a few weeks, and I am thinking of retiring. My broker wants me to do a rollover IRA, but then I won't be able to withdraw any amount until I am 59½. What are my options? Thanks for your help.

This is one situation where it could be a bad idea to roll over the 401(k) into an IRA. If you are at least 55 in the year you leave your job, you may be able to withdraw money from your 401(k) at any time without penalty. But if you roll the money over into an IRA, you're generally hit with a 10% early withdrawal penalty if you touch the cash before age 59½.

Public employees can make a similar mistake: If you have a 457 plan, you can withdraw the money without penalty after you leave your job -- no matter how old you are. But if you roll it over into an IRA, you'll generally have a 10% penalty for withdrawals before age 59½, too.

There are a few ways to access the IRA money before that age -- if, for example, you withdraw substantially equal amounts each year based on your life expectancy (called the 72(t) rule). To avoid the penalty, you must make these withdrawals for at least five years or until age 59½, whichever is longer.

But it would be a lot easier just to leave your money in the employer's plan for the moment, so you can withdraw it without penalty if you need it before age 59½. Or if your plan allows partial rollovers, you can shift some of the money into an IRA and leave some of it available in the 401(k). Ask your 401(k) administrator about the plan's rules.

Regardless of whether you make the rollover, you still will owe income taxes when you withdraw the money from a 401(k), 457 or traditional IRA.

For more information about retirement withdrawals, see 5 Mistakes You Can't Afford to Make.

MORE: Kiplinger.com | Your Retirement | Make Money Last | Column

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