Renwanz Insurance & Financial Solutions, Carlsbad, CA
Most people would want to wait until they are at least 59 1/2 years old to withdraw money from their 401k because that is the age when penalty free withdrawals can be taken. You can take withdrawals earlier, but there will be a 10% penalty for early withdrawal.
There are exceptions to the 59 1/2 age requirement:
You become totally and permanently disabled.
You terminate employment through permanent layoff, termination, quitting or taking early retirement in the year you turn 55, or later.
Pay for medical care up to the amount allowable as a medical expense deduction in the same year as the medical expense was incurred.
Your withdrawal is a response to a qualified domestic relations order.
You are required to begin 401k withdrawals by April 1 of the year following the year in which you turn 70 1/2. Regardless of when you take your withdrawal from your 401k, the amount you take out will be taxed as ordinary income for that tax year.
You should always seek out a qualified financial professional for help in these situations prior to taking action.
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There are exceptions to the 59 1/2 age requirement:
You become totally and permanently disabled.
You terminate employment through permanent layoff, termination, quitting or taking early retirement in the year you turn 55, or later.
Pay for medical care up to the amount allowable as a medical expense deduction in the same year as the medical expense was incurred.
Your withdrawal is a response to a qualified domestic relations order.
You are required to begin 401k withdrawals by April 1 of the year following the year in which you turn 70 1/2. Regardless of when you take your withdrawal from your 401k, the amount you take out will be taxed as ordinary income for that tax year.
You should always seek out a qualified financial professional for help in these situations prior to taking action.