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Question

Asked 10/19/2009

Can i withdraw from a 401k at 59 1/2 even if I am still employed full time?

Is there another way to borrow from my 401k?

 
 
 
 
 
Answers

Answer 1/5 - Submitted 10/19/2009

You can withdraw , but you will pay income tax , you may not have to pay the extra 10% penalty

or you can borrow from it and repay yourself.

you should have a contact number at work for your plan

 
 

Answer 2/5 - Submitted 10/19/2009

Probably. It is called an In service withdrawal since you are still "inservice: with the employer... However it is not mandatory that the employer allow it.
Some do. (most) some do not allow until 65-- some require so many years of service..
The administrator will know the for sure, as they can access the plan document which states exactly what is allowed... The employer also states Where you withdraw from, just what you have put in or your entire vested account balance...
You will have 20% automatically withheld for federal taxes, and possibly state (depends on if you state mandates withholding)
But the 10% penalty will no longer apply to you!

 
 

Answer 3/5 - Submitted 10/19/2009

The 401k in question is through another company the I am no longer employed by.

 
 

Answer 4/5 - Submitted 10/19/2009

Then you can take a distribution. A few companies have a wait period, but most don't. The old plan will have no effect on your current employment.
They still must withhold 20% federal tax.. You can roll the old plan into the new, or just withdraw from where it is.

 
 

Answer 5/5 - Submitted 10/19/2009

Your best bet is to roll it over into a Traditional or Roth IRA. These can usually be set-up at any financial institution. These type of plans are much less of a hassle to withdraw from.
The taxes will still apply, but you will have no penalty.
Withdrawls are mandatory at age 70 1/2.

 
 
 
 
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