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I need to withdraw money from my 401(k) account as soon as possible. Please let me know how to do this.?

Unexpected bills and medical bills have made it necessary to withdraw funds.

Dec 26, 2012 by Marvin from DeForest, WI in  |  Flag
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5 votes
Peter C. Karp Level 20

Marvin, The purpose of your 401k retirement plan is to provide for your golden years. There are times, however, when you need cash and there are no viable options other than to tap your nest egg. For this reason, the government allows plan administrators (employers) to offer loans to participants in a 401(k) plan (be aware that the government doesn't require this and therefore it is not always available.) There are certain restrictions and guidelines for withdrawing funds from a 401(k). You will need to contact your employer or review your summary plan description to find out the options available in your specific plan, such as a loan feature, in-service withdrawals after age 59 1?2 or hardship withdrawals. If you are currently employed, these are your only options for withdrawing funds prior to retirement or termination of employment.

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Comment   |  Flag   |  Dec 26, 2012 from San Francisco, CA

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5 votes
Clark B. Hoover Level 15

As you probably know, tapping into your 401(k) should be a last resort, but in these difficult times many people must use this option. Fortunately most 401(k) plans have a loan provision that allows you to borrow from your 401(k) without penalty, i.e. withdraw the money, as long as you pay it back withint 5 years at a competitive interest rate. Typically you can borrow up to half of your vested amount but it cannot exceed $50,000. As for the mechanics, you should contact the HR department and/or the fund administrator named on your account statements. They should provide you the necessary paperwork needed to withdraw the money. Keep in mind that if you do not pay the money back, then it will be treated as an early withdrawal and early penalties and taxes will apply. I hope this helps. Best of luck.

Comment   |  Flag   |  Dec 26, 2012 from Beverly Hills, CA

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Marvin - From a technical standpoint, to withdraw funds from a 401(k) account either contact your HR department or the 401(k) plan administrator (there is a good chance you can facilitate this online as well). From a "rules" standpoint, there are a few different ways to withdraw your funds; some ways will trigger penalties, others will fall into the exemption category and will not trigger penalties. I agree with Peter that you should check in with your employer (or the plan administrator) to see exactly what you can and cannot do. I would recommend just telling them exactly your situation is and see what solutions they have. Good luck with this as well as your health related concerns!

Comment   |  Flag   |  Dec 26, 2012 from Long Beach, CA

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