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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?
The minimum age for penalty-free withdrawals from your 401(k) account is 59 ½, and the IRS requires retirees to start making withdrawals by age 73. There are some caveats to this age restriction.
What is the age where a 401(k) withdrawal is tax-free? The age in which your 401(k) withdrawals are tax free is 59 1/2. When am I eligible to get my 401(k) early without penal.
Any 401(k) withdrawal that occurs before age 59 1/2, however, may be subject to an additional tax and a 10 percent penalty. ... For 2024, the maximum contribution you can make to a 401(k) plan is ...
Cashing out your 401(k) plan before age 59 ½ means the withdrawal will typically be subject to a 10 percent IRS penalty, on top of the income tax owed on the distribution.
But you’ll owe ordinary income tax and a 10% penalty if you withdraw earnings (i.e. gains and dividends your investments made inside the account) from your Roth 401(k) prior to age 59 1/2.
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