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Early withdrawals from a 401(k) will likely present long-term financial downsides. Usually withdrawing from your 401(k) prior to turning 59 1/2 results in a 10% early withdrawal penalty. The ...
Making an early withdrawal from your 401(k) might sound like a tempting idea — after all, it is your money. But once you know the ramifications, you may feel differently.
Based on 401(k) withdrawal rules, if you withdraw money from a traditional 401(k) before age 59½, you will face — in addition to the standard taxes — a 10% early withdrawal penalty. Why?
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A 401(k) is an employer-sponsored retirement account. Like other tax-advantaged savings accounts, 401(k) accounts offer a way to invest money without paying taxes. However, if you withdraw funds...
More specifically, the rule allows you to take a penalty-free withdrawal from the 401(k) plan of the sponsoring employer you're separating from at age 55 or later.
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