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401(k) plans allow you to begin withdrawing money, without penalty, after age 59½. However, there is a 10% penalty tax on withdrawals made before age 59½ (if you don't roll it over) from your 401(k) plan, unless the distribution is made under one of the limited circumstances allowed by law. That is, there is a penalty for taking your money "too soon."
Some Exceptions to the 10% Early Withdrawal Penalty for 401(k) Plans
The 10% early withdrawal penalty does not apply to these situations:
IMPORTANT NOTE: Using your retirement plan savings for non-retirement purposes should always be your last resort.
For more information, see the section Distributions Over Your Life Expectancy.
Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA/SIPC. United Wealth Management is a trade name of United Bank. Infinex and United Bank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.