What Are 401k Distributions?
401k distributions occur when an individual with a 401k takes money out of the account. Distributions can be taken without penalty after the age of 59 1/2. If the account holder takes out any money before this age, an early distribution penalty will apply. Once 401k distributions are taken, the money will be treated as regular income and the individual will have to pay income taxes on the amount distributed. Individuals get to choose how much money they take out and it can be difficult to decide how much to take out of the account at any one time.
