Although 59 1/2 is the magic number for starting to receive retirement plan distributions without penalty (whether you continue to work or not), you can get full access to your money in a company plan such as a 401(k) if you retire as early as 55.

The hitch is, you have to stop working entirely. If you plan to retire younger than that, you'll pay a penalty for spending the money early unless you follow a very specific set of rules for withdrawing it. Some company plans allow this, others don't. If yours doesn't, you'll have to roll your money into an IRA first and then initiate the withdrawals.

The new Roth IRA allows tax-free and penalty-free withdrawals of your contributionns before you hit 59 1/2 if those contributions are at least five years old.

But the rules for traditional IRAs dictate that you have to follow this withdrawal scheme at any age below 59 1/2 unless you are withdrawing for first-time home purchases or educational expenses. Here's how it works: You can take the cash in installments based on your life expectancy. Each year, you can withdraw a fraction of your balance derived from the number of years you are expected to live.

In other words, if actuarial tables predict you have another 30 years to go, you can withdraw 1/30th of the balance of your account each year. As long as you make what are called "substantially equal" withdrawals each year, you don't have to pay a penalty (although you do have to pay income taxes).

We don't recommend you do this unless you really need the income. (The 10% federal penalty for early withdrawals will be waived if you need the money because of death, disability, or, as of Jan. 1, if it's going to pay approved medical expenses or health insurance costs, or if it's for education expenses or first-time home purchases up to $10,000.) If you do take early withdrawals, consult a tax expert who has some experience in planning IRA distributions. You'll need to continue with the schedule only until you reach 59 1/2 or for at least five years, whichever is longer. After that, you can modify the schedule, or take a lump payment.