At what age can I withdraw from my 401k

Question

I am 61 years old and I don't want to withdraw money from my 401k too soon. I am wondering at what age can I take money from the 401K without being subject to penalty?
Thanks

chepner · Accepted Answer

Penalties only apply to certain distributions prior to the age of 59 1/2 years. You're 61, so you no longer need to qualify your withdrawals.

Generally, distributions of elective deferrals cannot be made until
one of the following occurs:

You die, become disabled, or otherwise have a severance from employment.
The plan terminates and no successor defined contribution plan is established or maintained by the employer.
You reach age 59½ or incur a financial hardship.

(Source: https://www.irs.gov/retirement-plans/plan-participant-employee/401k-resource-guide-plan-participants-general-distribution-rules)
Keep in mind that you will be required to withdraw money sometime in the next 10 years or so, depending on when you retire or turn 72.

mhoran_psprep · Answer

The basic rule for traditional 401(k) and Traditional IRA money is that once you reach 59.5 you can take the money out of the account. The withdraws will be taxed but you will avoid any additional taxes or penalties.
The 401(k) Resource Guide - Plan Participants - General Distribution Rules describes the rules, and also gives a list of hardships to cover cases where somebody is younger than 59.5.
If you are younger than 59.5 you can pull money out of your IRA, and may be able to pull money out of your 401(k). In either case there will be an additional tax.

Tax on early distributions. If a distribution is made to you under the
plan before you reach age 59½, you may have to pay a 10% additional
tax on the distribution. This tax applies to the amount received that
you must include in income.

Check with the specific plan rules for your company 401(k) to see if there are any limitations if you want to pull money out while you are still working.
Roth money has an additional twist. It has a 5 year rule.

Designated Roth contributions
Unlike pre-tax salary deferrals, which are not taxed when you
contribute them to the plan, you have to pay taxes on your designated
Roth contributions. This means your gross income for the year you make
designated Roth contributions will be higher than if you had made only
pre-tax salary deferrals.
However, any pre-tax salary deferrals and related earnings are taxable
when you withdraw them from the plan. Roth contributions, on the other
hand, are not taxed when you withdraw them from the plan. Earnings on
Roth contributions are also not taxed when they are withdrawn from the
plan if your withdrawal is a qualified distribution. A “qualified
distribution” is a distribution that is made:

at least 5 years after the first contribution to your Roth account; and
after you’re age 59½ or on account of your being disabled, or to your beneficiary after your death.

So if the Roth portion of the 401(k) is less than 5 years old, you can't make a qualified withdraw of the Roth gains, even if you are older than 59.5.

At what age can I withdraw from my 401k

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