Do you have to wait till you retire to withdraw money from your 401 K?

Answer 1

No but you will have to pay taxes on money u take out. Ur employer may allow u to take out a loan from ur 401K and even pay yourself the interest on the money u borrow bc u are simply borrowing from yourself. Some may allow u to withdraw if u have an adequate claim of hardship...u have to submit proof of your hardship, though. Like past due notices (eviction or foreclosure), back tax notices, etc. Also some allow withdrawals for entrance of College or a death in the family (immediate member) also. The amount of taxes u pay depends on whether u chose "pre-tax" or "after-tax" when u signed up for your 401K. See your human res. dept.

Answer 2

In most cases, you can't withdraw money from a 401(k) until you leave the employer with whom you have the 401(k). When you leave, you are allowed to withdraw the money, but you must roll it into another retirement plan (usually an IRA) or pay a 10% penalty on top of regular income tax. This penalty does not apply if your are 59 1/2 at the time of the withdraw. There is also an exception for beginning a series of "substantially equal payments" over your expected lifetime. If there are other exceptions, I don't recall them.

Answer 3

If you leave your job before retiring, you can normally withdraw your 401K money. You can roll it over into a traditional IRA without tax consequences, otherwise you pay income tax on the amount withdrawn at whatever your rate is for the year including the 401K money. If you're under 59-1/2 and pull the money out and don't roll it over, you have to pay a 10% penalty on the amount withdrawn in addition to the income tax.

Answer 4

Starting at age 59 1/2 you can withdraw without penalty, but you pay taxes on what you withdraw.

Answer 5

sometimes you can borrow from it without paying a penalty