If you're already over 59.5, you meet the minimum age necessary to make non-penalized 401(K) withdrawals. So, you shouldn't have anything to worry about. Withdraw at will, and you'll be taxed based on normal income tax rates. It's common for the Federal government to take out taxes up front, but you'll probably owe a fair amount on state taxes when it's time to file.

If you're under 59.5, there's normally a 10% penalty tax that's placed on your funds in addition to the normal income tax rate. This is designed to dissuade younger individuals from making 401(K) withdrawals. There are limited exceptions made for hardship withdrawals, and special stimulus draw downs for first time home buyers. Check with the IRS and US government specifics on retirement to see if you qualify for one of these, if you're under minimum age.

Any 401(K) withdrawal should take a balanced look at your future taxes and retirement. Make sure you're prepared to deal with higher income taxes than expected (many are shocked when having to pay this up front, unlike taxes that come out at a job through paycheck tax withholding), and examine your complete retirement assets too, to make sure you'll still have enough to last.

There is not a penalty since you are at the required age. All you will need to do is pay taxes on the money that is in there and your all set to go. Enjoy.