When Can You Withdraw From Your 401(k)?
Understanding 401(k) withdrawal rules can help you avoid costly penalties and make the most of your retirement savings. The rules depend on your age, employment status, and reason for withdrawal.
Key Withdrawal Ages
Withdrawal Rules by Age
| Age | Rule | Penalty |
|---|---|---|
| Before 55 | Early withdrawal (limited exceptions) | 10% penalty + income tax |
| 55-59½ | Rule of 55 (if separated from employer) | No penalty if qualified |
| 59½+ | Penalty-free withdrawals | No penalty, income tax applies |
| 73+ | Required Minimum Distributions | 25% penalty if missed |
Penalty Exceptions
- Disability (permanent)
- Medical expenses exceeding 7.5% of AGI
- Qualified domestic relations order (QDRO)
- Substantially equal periodic payments (72t/SEPP)
- IRS levy
- Qualified birth or adoption ($5,000 max)
Frequently Asked Questions
If you leave your employer during or after the year you turn 55, you can take penalty-free withdrawals from that employer 401(k). This does not apply to 401(k)s from previous employers or IRAs. For public safety workers, the age is 50.
Traditional 401(k) withdrawals are taxed as ordinary income at your marginal tax rate. Roth 401(k) withdrawals are tax-free if you are 59½+ and the account has been open 5+ years. State income taxes also apply in most states.
The penalty for missing a Required Minimum Distribution was reduced from 50% to 25% by SECURE 2.0. If corrected within 2 years, the penalty drops to 10%. RMDs start at age 73 (75 starting in 2033).