Can I withdraw money from my 401(k) before age 5912?

Yes, you can withdraw money from your 401 (k) before age 59½. However, early withdrawals often come with hefty penalties and tax consequences. If you find yourself needing to tap into your retirement funds early, here are rules to be aware of and options to consider.

What are the 401(k) early withdrawal penalties?

This can include early withdrawal penalties and taxes: federal and state income taxes and a 10% penalty on the amount that you withdraw. Most Americans retire in their mid-60s, and the Internal Revenue Service (IRS) allows you to begin taking distributions from your 401 (k) without a 10% early withdrawal penalty as soon as you are 59½ years old.

What are 401(k) withdrawal rules?

401 (k) withdrawal rules affect when account holders can take withdrawals without penalty. If you retire after age 59½, you can start taking withdrawals without paying an early withdrawal penalty. The IRS allows for hardship withdrawals that usually are not subject to the 10% penalty.