Basics are: You can't work for the company at all, no part-time or anything; you can only take the money out of a 401K from that company (no other IRA's); You can't leave the company until you are 55; and the money is taxed like a normal distribution as if you are 59.5.



The following additional exceptions apply only to distributions from a qualified retirement plan other than an IRA:

Distributions made to you after you separated from service with your employer if the separation occurred in or after the year you reached age 55, or distributions made from a qualified governmental benefit plan, as defined in section 414(d) if you were a qualified public safety employee (federal state or local government) who separated from service in or after the year you reached age 50.