Robert Brokamp

speaker

4,411 appearances 40 recordings 3 series first heard Oct 2025 last heard 4d ago

Robert Brokamp’s voice in public audio — every appearance, attributed to the second.

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recordings per month · last 12 months

Recordings per month over the last 12 months — 40 in all, peaking in Aug 2026 with 5.

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Motley Fool Hidden Gems Investing · Three Lesser-Known But Powerful 401(k) Features · 12 Sep 2026 podcast

The bottom line here is that the mega backdoor Roth strategy may not work if you're a highly paid employee who works at a place where most of the other employees aren't saving as much as you do. voice-verified

So talk to your plan provider, ask if you're able to do the mega backdoor Roth and whether the company regularly passes non-discrimination testing. voice-verified

All right, let's move on to our third lesser known 401k feature. voice-verified

And it's come to be known as the rule of 55. voice-verified

So generally speaking, withdrawals from a tax advantaged account before age 59 and a half are assessed a 10% penalty. voice-verified

However, there are many exceptions. voice-verified

Some of those exceptions apply to both IRAs and employer sponsored accounts. voice-verified

Others apply to just one or the other. voice-verified

The Rule of 55 is one of those exceptions, and it only applies to 401ks and similar plans like 403bs and the Federal Thrift Savings Plan. voice-verified

Any employee who separates from service during or after the calendar year the employee reaches age 55 will not owe a 10% early distribution penalty on withdrawals. voice-verified

However, like all things with Uncle Sam and the IRS, conditions apply. voice-verified

First off, the exception only applies to the plan you are participating in during the calendar year in which you turn 55 or older. voice-verified

Doesn't apply to 401ks you had with employers you worked for before turning 55. voice-verified

However, there may be a workaround. voice-verified

Roll that old 401k into your current employer's plan before you separate service if the plan accepts rollovers. voice-verified

for the rule of 55 to work, the money must remain in the employer's plan. voice-verified

If you roll over your funds to an IRA or a new employer's plan, you lose the ability to use the rule of 55. voice-verified

And any separation from service counts, voluntary or otherwise, and working for another employer or starting your own business doesn't prevent you from utilizing the age 55 exception with the 401k at your former job, as long as you didn't transfer those funds to a different account. voice-verified

The news is even better for some, not all, but some qualified public safety employees, such as eligible law enforcement officers, corrections officers, customs and border protection officers, firefighters, EMTs, forensics employees, air traffic controllers. voice-verified

For the folks who are eligible to do this, they can take penalty-free distributions at age 50 or 25 years of service under the plan, whichever is earlier. voice-verified

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