As of 2025, the average 401(k) balance for Americans in their 50s is around 490,000 dollars. That means a 54-year-old with 4 ...

Key Points The rule of 55 allows penalty-free 401(k) withdrawals only from your current employer’s plan after separation.

Here's what's at stake.

Keep these points in mind as you prepare for that big birthday.

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them. Retiring at 55 can feel like crossing a finish line, but ...

There's usually a 10% early withdrawal penalty if you take money out of your 401(k) under age 59 1/2. The Rule of 55 lets you take funds from your most recent employer's 401(k) without penalty if you ...

If you try to withdraw early from just about any retirement plan, you'll be slapped with a penalty—an incentive to leave your money alone and let it build toward retirement like you always intended.