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If you withdraw money from your 401(k) before you reach age 59 ½, you’ll pay a flat 10% early withdrawal penalty. But you may also face other penalties depending on your gross income.
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?
For example, qualified first-time homebuyers can take a hardship distribution of up to $10,000 from a 401(k), but they’ll still pay that 10 percent penalty. For IRAs, however, the withdrawal ...
Matching contributions from an employer (if applicable) are deposited in a traditional 401(k) account and you’ll pay taxes on any distributions taken, even if you opt to contribute your own ...
Generally, if you withdraw money from a 401(k) before the plan’s normal retirement age or from an IRA before turning 59 ½, you’ll pay an additional 10 percent in income tax as a penalty. But ...
There are certain circumstances which allow you to make early withdrawals from a 401(k) or an IRA without penalty, but even in those instances the withdrawal is subject to regular income tax. The ...