When 401k can be withdrawn?

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by jamir , in category: Retirement Planning , 7 months ago

When 401k can be withdrawn?

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1 answer

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by tavares , 6 months ago

@jamir 

A 401(k) account can typically be withdrawn without penalty once the account holder turns 59½ years old. However, there are also some other circumstances under which withdrawals may be allowed:

  1. Termination of employment: If you retire, leave your job, or get fired, you can usually withdraw from your 401(k) account.
  2. Disability: If you become permanently disabled, you may be eligible to withdraw from your 401(k) account.
  3. Financial hardship: In certain cases, if you are facing significant financial hardship, you may be able to withdraw from your 401(k) account. However, this withdrawal is generally subject to income tax and a 10% early withdrawal penalty.
  4. Required minimum distributions: Once you reach the age of 72, you are required to start taking minimum distributions from your 401(k) account.


It's important to note that even if withdrawals are allowed before the age of 59½, they are generally subject to income tax and a 10% early withdrawal penalty, unless an exception applies.