Rule of 55 rule and rollovers

[Retireatee1]

Happy New Year all!

I've started a new job this year and have an issue to navigate.  I'll be 54 this year and want to set the stage for the possibility of early retirement next year.  The new job is going well and if that remains the case I won't need that option.  That being said I want to exploit the Age of 55 rule in order to fund any gap years prior to 59 1/2 and protect my non-retirement savings.  Currently my 401K balance is zero.  If I were to rollover funds from my IRA into the 401K, would those then be available for qualified distributions in the event that I separated from service after Jan 1, 2026?  If yes, are there any caveats and should I delay the rollover to next year?

Thanks!

[Sandi_k]

Yes, the rollover would allow you to use the Rule of 55 - assuming your current 401(k) plan allows it.

I would get it underway now - and having -0- in your IRA will mean you also can make a backdoor Roth contribution for 2025.

[Retireatee1]

Yes, it did occur to me that my plan may or may not allow either the rollover or the Rule of 55 withdrawals.  I'll need to verify that.

The backdoor Roth conversion is interesting, but I'd have to roll the entire IRA over to avoid the pro rata rule.  I was only going to roll a portion over due to the higher fees on 401ks.  I'll have to think about that some more.