In addition to the all of the great information above, you should take something else into consideration. If you are over 59.5 and plan on doing this on a regular basis, you should have a "bucket of money" available that is in cash or very short term high quality bonds, or CD's. You do not want to be in the position of having to sell stock funds at the wrong time in order to make your withdrawals. In general a good rule of thumb is keeping any money you might need in 5 years or less in these type of safe investments.
The best place to start is to check online, if you have online access, a lot of the forms will be online in your account and you would look for a distribution form. If you do not have online access, or cannot locate the forms online, the next best option is to contact your HR department and ask for the correct forms. They will be able to get those forms to you, tell you who to turn them into, and any special instructions with the process.
Good Morning Julia!
Accessing the forms online from your 401k provider is probably the easiest option, if available. Otherwise, contact the providers customer service department and request the forms be emailed or mailed to you.
On another note, not knowing your personal situation and reason for accessing these funds, you should also consult with an advisor regarding your best options. Depending on your age (59 1/2 is the key age) you may or may not have penalties due on the distribution. On top of this 100% of the distribution will be taxable at your current tax rate and due this coming April if you take the distribution prior to 12/31, where as if you wait until January it will be due April of 2016.
Furthermore, depending how much you have in your account and how much you need to access, your plan might offer a loan provision where you can access up to 50% without paying penalties or taxes. If this option is available it would be worth considering.
Please reach out if you have any further questions.
Brett Gottlieb Brett@comprehensiveadvisor.com
also if you are under 59 1/2, unless your plan allows for in-service distributions without an age limit, aside from a loan, there are strict limitations in your ability to withdraw funds while employed there-Hardship Distributions are allowed in only very limited instances
Julia, if this is your current employer's 401k plan, you'll likely be eligible for a loan if desired, rather than a withdrawal. If it's a former employer's 401k plan, you won't be eligible for a loan. The good news is you can most likely transfer your former 401k plan balance into your current 401k plan, then consider a loan.
Best of all, you're already reading this on the Brightscope.com website, so please search for your current and any former 401k plans you may have right on this site. And you can find the plan administrator's phone number (and name) to contact their department immediately to get some assistance in making your decision. Good luck.
Why are you withdrawing money from your 401k? To pay bills or creditors? I would need to know more of the specifics of your situation, but if you are considering taking an early withdrawal to pay bills or creditors, DON'T DO IT! If you are behind on your bills or owe money to creditors, may mean you are close to bankruptcy. If this is the case, your 401k is completely protected from creditors in bankruptcy. Keep it that way.
Hi Julia I know that sometimes people have hardships that will lead them to withdraw money from a 401k. If you can avoid it, do. First, it is very expensive: you will have to pay income taxes and penalties if you are under 59.5 Second, you are unlikely to ever put it back in. The long term cost for a 50 year old is that for every $ that you withdraw you will lose something like $5 of retirement income. You will eventually need retirement income Third, as was mentioned by Matthew , in the extreme case that you may be driven to bankruptcy, retirement assets are protected: you will get to keep them, if you don't touch them. Fourth, there may be other solutions, for instance loans from 401k may be a better choice depending on the circumstances, or possibly negotiating with your creditors. If you can avoid to withdraw from your 401k, do. Best of luck!