Ask Terry Questions 40l(k) withdrawal

40l(k) withdrawal

By Terry Savage on July 31, 2018 | Financial Planning / Retirement

Can I take a one time withdrawal from a 401K without either triggering automatic withdrawals or being required to make regular withdrawals?

Terry Says

That depends on the rules of your plan. Most plans allow you to borrow some money out of your 40l(k). But it is considered a LOAN, not a withdrawal. You pay interest on that amount. And if you leave the job with the loan outstanding, you will owe taxes — and a penalty if you are under age 59-1/2! So don’t consider your 40l(k) to be a piggy bank — at least not unti you reach retirement age.

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