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How can I withdraw my 401k.

Jan 20, 2014 by Gabriel from Houston, TX in  |  Flag
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Rudy Dahbura Level 3

If you're over the age of 59 1/2 and still employed, you may be eligible for an in-service withdrawal. You'll need to speak with your plan administrator in order to determine what's eligible.

Comment   |  Flag   |  Jan 30, 2014 from Redondo Beach, CA

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What do you want to do with it? That will determine how you need to with draw it. Roll it over to another 401(k), to an IRA, ir do you need to cash it in for some reason?

The HR Dept. or the Plan Administrator at the employer where your 401(k) is can help direct you intially, you may want to meet with a financial advisor also.

Comment   |  Flag   |  Jan 20, 2014 from Canton, GA

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Gabriel,

To give you a helpful answer, we'll need additional information. There are two ways to get money from your 401k while you are still employed by the company sponsoring the plan: in-service withdraw or take a loan. Each option has tax considerations to review. A loan will be paid back at a set interest rate with each additional contribution to the plan. An in-service withdraw is possible if the plan allows it. The IRS dictates how and why you can access the money and the plan must adhere to these minimum standards - they can be more restrictive however. If your company allows in-service withdraws, then you'll more than likely pay ordinary income taxes plus a 10% penalty (only if you're under 59.5 years old). If you need the money due to unforeseen circumstances, then perhaps a loan is a better option. Loans wouldn't incur taxes and penalties, but are require to be paid back. There's more to it than this, however. The true cost of taking money from the plan is the amount of money you lose by not allowing compound interest to work it's magic.

If you're speaking about a former 401(k) plan that you are looking to access, I've created an infograph on my blog here: http://www.justinfollmer.com/blog/bid/372117/401-k-Rollovers-An-Infograph . This same question seems to come up frequently, thus the reason for my infograph. Check it out and see if this is what you're referring to.

Otherwise, no matter what option you want to go with, you'll need to work with your HR department (or the individual who handles the plan if you don't have a department) to get the process started. They'll be able to outline your options and then it'll be up to you to perform the due diligence to ensure you're not hurting yourself financially. You can also ask friends and family for a referral to their financial advisor for help or any one of us on here would gladly help. Good Luck!

Comment   |  Flag   |  Jan 30, 2014 from Summerville, SC

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