You can generally begin withdrawing from your 401(k) without a 10% early withdrawal penalty at age 59½. Withdrawals before this age typically incur a 10% penalty plus ordinary income taxes, unless you qualify for certain exceptions
. Key points about 401(k) withdrawals:
- Age 59½ : This is the standard age at which you can take penalty-free withdrawals from your 401(k) plan. You still owe regular income taxes on traditional 401(k) withdrawals, but no 10% penalty applies
- Rule of 55 : If you leave your job during or after the calendar year you turn 55, you can withdraw from your 401(k) associated with that employer without the 10% penalty, even if you are younger than 59½. However, taxes still apply. This rule does not apply if you are still employed by the company
- Special exceptions : Certain hardship withdrawals, disability, or other IRS-recognized exceptions may allow penalty-free early withdrawals before 59½, but these are limited and often still subject to income tax
- Required Minimum Distributions (RMDs) : Starting at age 73, you must begin taking minimum withdrawals from your 401(k], but this is separate from the age you can first withdraw without penalty
In summary, the earliest age to withdraw from a 401(k) without penalty is usually 59½, with an exception allowing penalty-free withdrawals starting at age 55 if you have left your employer during or after that year. Otherwise, early withdrawals before 59½ typically incur a 10% penalty plus taxes
