Penalty-fee 401(k) distributions for early retirees
If you leave your job at age 55 or older, you can tap your 401(k) or other employer-sponsored retirement account penalty free, avoiding the normal 10% federal tax penalty on early withdrawals. But you’ll still owe income taxes on distributions. The early-out exception does not apply to IRAs which penalize distributions before age 59 ½.
It’s also the age when individuals with a high-deductible health insurance plan can contribute an extra $1,000 to a tax-deferred H S A in both 2012 and 2013 to pay out-of-pocket medical costs tax-free. You can roll over unused H S A funds from year-to-year, making it an ideal way to supplement retirement savings.