# Rule of 55

*Retirement & Benefits — Finicade finance glossary*

The rule of 55 lets you withdraw from the 401(k) of the employer you just left, penalty-free, if you leave in or after the year you turn 55. It applies only to that plan, not to IRAs and not to old 401(k)s from previous jobs. This creates a genuine trap: rolling the account into an IRA for lower fees permanently forfeits the exception, so early retirees should decide the sequence before moving anything.

**Also known as:** age 55 rule, separation from service exception

**Related terms:** [Early Withdrawal Penalty](https://finicade.com/glossary/early-withdrawal-penalty), [401(k)](https://finicade.com/glossary/401k), [457 Plan](https://finicade.com/glossary/457-plan), [401(k) Rollover](https://finicade.com/glossary/401k-rollover), [Safe Withdrawal Rate](https://finicade.com/glossary/safe-withdrawal-rate)

Source: https://finicade.com/glossary/rule-of-55