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How do you withdraw from your 401k after age 59?

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The question should say "age 59 and 1/2 years". For whatever reason, 59.5 years is the age at which you can start withdrawing funds from your 401K without penalty. Before 59 and 1/2, the penalty for early withdrawal is 10% of the taxable amount of your withdrawal.

You can also withdraw money from your fund without the 10% penalty if you are leaving your employer when you are at least 55 or you become disabled.

If you are eligible to withdraw money from your fund then you have to pay income taxes on the withdrawal. However, you do not have to pay income taxes if the money you withdraw go into a different employer sponsored plan or an Individual Retirement Account (IRA).
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