What is the Rule of 55 and how does it let me access my 401(k) early?

The Rule of 55 lets you withdraw from your 401(k) without the usual 10% early-withdrawal penalty if you leave your job in or after the year you turn 55. It's a valuable bridge for early retirees who need income before the standard 59½ threshold. The catch: it applies only to the plan at the employer you just separated from — not to old 401(k)s from previous jobs and not to IRAs. So if you plan to retire at 55, do not roll your current 401(k) into an IRA first, because that would forfeit the benefit. Withdrawals are still taxed as ordinary income; you just skip the penalty. Certain public-safety workers qualify at 50. If early retirement is your goal, leave money in your final employer's plan as a penalty-free bridge. Plan the timeline at wealthserene.com/tools/fire-calculator.