What are 401(k) withdrawal rules?

401 (k) withdrawal rules affect when account holders can take withdrawals without penalty. If you retire after age 59½, you can start taking withdrawals without paying an early withdrawal penalty. The IRS allows for hardship withdrawals that usually are not subject to the 10% penalty.

Can I withdraw money from a 401(k) without paying tax?

You could also be subject to a tax penalty, depending on why you're taking the money and your age. The earliest age at which you can withdraw funds from a 401 (k) account without paying a 10% early withdrawal penalty tax is 59½, but the IRS does provide some exceptions to this rule. The penalty is waived if:

Do you have to pay back 401(k) withdrawals?

Pros: You're not required to pay back withdrawals of the 401 (k) assets. Cons: Hardship withdrawals from 401 (k) accounts are generally taxed as ordinary income. Also, a 10% early withdrawal penalty applies on withdrawals before age 59½, unless you meet one of the IRS exceptions. Sign up for Fidelity Viewpoints weekly email for our latest insights.