Fisher Investments Answers Your Questions on 401(k) Withdrawals

401(k) plans are a common way many Americans save and invest for retirement. If you have a 401(k), you may wonder how and when you can start withdrawing from it. There are several common ways to access your 401(k) money, some of which may depend on your workplace’s 401(k) plan or provider.
You can generally begin withdrawing money from a 401(k) plan at age 59.5 without penalty. At age 72, your 401(k) is subject to required minimum distributions (RMDs). RMDS are the minimum amount you must take out each year to avoid penalty, but you can withdraw more than that if needed.
You may need to withdraw money from your 401(k) before age 59.5. Early withdrawals come with a 10% penalty in addition to any regular income tax you owe on the withdrawal amount. However, there are some scenarios, known as hardship distributions, which may be exempt from the early withdrawal penalty.
Finally, you may be able take a loan against your 401(k) funds. There are specific circumstances that qualify for these loans. You generally will pay interest on the loan and must repay the funds within five years.
To learn more about 401(k) plans, watch Fisher Investments’ other videos in this series.
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