You usually have to wait until you reach age 59 ½ before you can dip into your retirement funds penalty-free. Otherwise, you end up forfeiting 10% of the amount you withdraw from your 401(k) or similar tax-deferred retirement plan. But what if you want to retire sooner than that and need access to your money?If you are at least 55 years old, you may be in luck, thanks to what is known as the Rule of 55. This IRS provision has saved one retiree “about $24,000 in tax penalties,” and another says they “wouldn’t have been able to retire from teaching early” without it, said The Wall Street Journal. And yet, it remains a “tax break few people know about, and even fewer use.”
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