401(k) Withdrawal Information
You are eligible to begin receiving payments from your 401(k) plan at retirement or when you leave employment with your current employer. Additional in-service withdrawal options may also be available to your plan (see below). How and when you choose to take payments from your account are important decisions. There are many considerations - the form of payment, the tax consequences, and your other forms of retirement income. You should review several factors before making a decision, including:
- You only pay taxes on money you receive.
- Roth assets can be withdrawn completely tax-free if certain requirements are met (see below).
- Funds that remain in your account and any future investment earnings continue to accumulate tax-deferred until they are withdrawn.
- You may continue to direct the investment of the assets that remain in your account as allowed by your employer's plan.
- Any remaining account balance will be available for distribution to your beneficiary(ies) in the event of your death.
- You are subject to 20 percent mandatory federal tax withholding if you elect to directly receive funds eligible for rollover to another employer plan or an IRA. Please consult the Special Tax Notice Regarding Plan Payments contained in the withdrawal packet for your plan. You may also be subject to mandatory state tax withholding.
- Withdrawals may be subject to an additional 10 percent penalty tax for early withdrawal. Please review the Special Tax Notice Regarding Plan Payments contained in the withdrawal packet for additional information.
- For additional information regarding withdrawals of Roth 401(k) assets, please review our Roth 401(k) section.
When can I withdraw assets from my account?
You are eligible to withdraw assets from your account under the following conditions:
- At retirement
- At separation from service with your employer for any reason
Additional In-Service Withdrawal Options:
- After age 59½*.
- After age 70½*.
- After-tax assets*. If you make regular after-tax contributions (excluding Roth contributions), you are eligible to take a withdrawal of after-tax assets up to two times per calendar year.
- Hardship withdrawals*. While you are still in-service, you may be eligible to withdraw funds from your account in certain hardship situations.
*Note that the above in-service withdrawal provisions are not available to all plans. Please check with your employer or ICMA-RC to confirm the available in-service withdrawal options for your plan.
Early withdrawals from your 401(k) account may be subject to an IRS imposed 10% penalty tax. Assets can be withdrawn without penalty if at least one of the following applies:
- The distribution is made on or after the date you attain age 59½.
- You separated from service with your employer during the year that you attain age 55, or later.
- The distribution is rolled-over to another eligible retirement plan within 60 days.
- You receive equal payments made over your life expectancy.
- You are permanently disabled.
- The account is being paid to your beneficiary(ies) in the event of your death.
- The distribution is attributable to assets received via a divorce-related QDRO.
- You take a distribution while serving as a reservist for the US military on active duty for at least a 180 day period.
If you would like to request a withdrawal from your account, please contact Investor Services at 800-669-7400, and request the appropriate withdrawal paperwork.