Does the Rule of 55 apply to my IRA or only my 401(k)?

The Rule of 55 applies only to a workplace plan like a 401(k) or 403(b), not to IRAs. Under this IRS provision, if you leave your job (quit, are laid off, or retire) in or after the calendar year you turn 55, you can take penalty-free distributions from that specific employer's plan, though you still owe ordinary income tax. A key trap for FIRE planners: if you roll that 401(k) into an IRA, you lose Rule of 55 access, because IRAs require you to wait until 59.5 or use 72(t). It also only covers the plan of the employer you just left, not old 401(k)s from prior jobs, unless you consolidated them into your current plan before leaving. Certain public-safety workers get an even earlier age. If you plan to retire between 55 and 59, leaving money in the 401(k) can be smarter than rolling it out.