How can participants get money out of their 401(k) account?
Generally, there are “distribution events” that are common to most plans: retirement, separation from service, death and permanent disability. In these situations the participant or the beneficiary may receive distributions from the plan. Many plans have additional ways to provide the participant access to plan funds, such as loan provisions, hardship distributions and age 59 in-service distributions. Be aware, however, that there are restrictions and/or tax consequences for most distributions. Taking a distribution prior to retirement means the loss of tax-deferred growth potential on that amount.
Related Questions
- One of our former employees has money in a NADART deferred account. Why didn’t he receive a participant statement along with my other participants statements?
- What happens to account balances if participants do not use all the money deposited for the current Plan Year?
- How long does it take for the money to be in the international beneficiarys account?
