Withdrawals taken from your 401(k) account if you are age 59½ or older will not have a penalty. IRA withdrawals are considered early before you reach age 59½, unless you qualify for another exception to the tax.Provides for special distribution options and rollover rules for retirement plans and IRAs and expands permissible loans from certain retirement plans. The rule of 55, or the 401k 55 rule, lets you withdraw penaltyfree from your 401(k) or 403(b) before you reach 59.5, in certain situations. Call the Texas Municipal Retirement System or TMRS at 1.800. 924.8677 to request your personalized retirement estimate. Enter your filing status, income, deductions and credits and we will estimate your total taxes. Based on your projected tax withholding for the year, While the earliest age for penaltyfree withdrawals is 59½, or 55 if you've left or lost your job, there are a few exceptions to this rule. These withdrawalscalled required minimum distributions (RMDs)are when the IRS collects the tax on growth and income.