# How to Withdraw Money From Your 401(k) - SmartAsset **Covers**:: **Source**:: [How to Withdraw Money From Your 401(k) - SmartAsset](https://smartasset.com/retirement/how-to-withdraw-from-401k) **Creator**:: [[smartasset.com]] # Highlights ##### ^261780945 Goto: https://smartasset.com/retirement/how-to-withdraw-from-401k?__readwiseLocation=0%2F6%2F1%2F1%2F3%2F3%2F1%2F3%2F1%2F9%2F23%3A101%2C0%2F6%2F1%2F1%2F3%2F3%2F1%2F3%2F1%2F9%2F23%3A242#:~:text=By%20age%2059%C2%BD%20(and%20in%2Cto%20pay%20a%20penalty%20tax. ###### ^261780945q By age 59½ (and in some cases, age 55), you will be eligible to begin withdrawing money from your 401(k) without having to pay a penalty tax. ^261780945 ##### ^261781010 Goto: https://smartasset.com/retirement/how-to-withdraw-from-401k?__readwiseLocation=0%2F11%2F1%2F1%2F3%2F3%2F1%2F3%2F1%2F9%2F23%3A150%2C0%2F11%2F1%2F1%2F3%2F3%2F1%2F3%2F1%2F9%2F23%3A322#:~:text=withdrawing%20from%20your%20401(k)%20before%2Ctop%20of%20normal%20income%20taxes. ###### ^261781010q withdrawing from your 401(k) before age 59½ is an option, but consider it a last resort. That’s because early withdrawals incur a 10% penalty on top of normal income taxes. ^261781010 ##### ^261781025 Goto: https://smartasset.com/retirement/how-to-withdraw-from-401k?__readwiseLocation=2%2F12%2F1%2F1%2F3%2F3%2F1%2F3%2F1%2F9%2F23%3A2%2C2%2F12%2F1%2F1%2F3%2F3%2F1%2F3%2F1%2F9%2F23%3A194#:~:text=Consider%20the%20consequences%20of%20a%2Cthe%20time%20he%20turns%2060. ###### ^261781025q Consider the consequences of a 30-year-old withdrawing just $5,000 from his 401(k). Had the money been left in the account, it alone would have been worth over $33,000 by the time he turns 60. ^261781025 ##### ^261781029 Goto: https://smartasset.com/retirement/how-to-withdraw-from-401k?__readwiseLocation=0%2F18%2F1%2F1%2F3%2F3%2F1%2F3%2F1%2F9%2F23%3A25%2C2%2F18%2F1%2F1%2F3%2F3%2F1%2F3%2F1%2F9%2F23%3A251#:~:text=you%20may%20qualify%20for%20what%E2%80%99s%2Call%20plans%20will%20offer%20one. ###### ^261781029q you may qualify for what’s known as a [hardship withdrawal](https://smartasset.com/retirement/411-401k-hardship-distributions) and avoid paying the 10% early distribution tax. While the IRS defines a hardship as “an immediate and heavy financial need,” your 401(k) plan will ultimately decide whether you are eligible for a hardship withdrawal and not all plans will offer one. ^261781029 ##### ^261781283 Goto: https://smartasset.com/retirement/how-to-withdraw-from-401k?__readwiseLocation=0%2F24%2F1%2F1%2F3%2F3%2F1%2F3%2F1%2F9%2F23%3A34%2C0%2F24%2F1%2F1%2F3%2F3%2F1%2F3%2F1%2F9%2F23%3A264#:~:text=401(k)%20loans%20cannot%20exceed%20%2450%2C000%2Ctax-deductible%2C%20loan%20payments%20are%20not. ###### ^261781283q 401(k) loans cannot exceed $50,000 or 50% of the vested account balance. That means if you have $60,000 in your 401(k), you can borrow up to $30,000. And while normal 401(k) contributions are tax-deductible, loan payments are not. ^261781283