When you are over 59 1/2, you are not subject to an early distribution penalty from either a 401(k) or an IRA.

If you are still working for the company, there may be restrictions in the plan that keep you from withdrawing money.

Don't forget that you are still subject to federal and state income taxes when you take retirement money out of a 401(k).

Yes, at age 59 and six months, you're eligible to start drawing off your plan with no consequences beyond the normal tax rates. Beginning to take disbursements now or in your sixties is highly encouraged. You need to start taking out money before you reach 70 and six months.

Note that all 401k deductions will be subject to your regular income tax rates. If you were under retirement age, an extra 10% tax penalty would apply, but that's not the case here. If you're pulling in extra money from sources like a pension, Social Security, part time work, etc. then your tax rate could be kicked higher. Try to strike a careful balance when taking out your 401k disbursements.

Also, many providers take Federal taxes off the top, but not all deduct state taxes from your funds. Find out whether or not this is the case with your 401k administrator. It could help you save headaches and high state tax bills later on.

You should remember to take a look at the size of your 401k, its anticipated growth rate, and determine your "safe" withdrawal rate. This is the rate you can take money from the fund without depleting it before the expected end of your life. There are plenty of great financial calculators and advisers online who can help you with this.