How to Withdraw Money from Your 401(k) Plan

The 401k plan, an employer-sponsored retirement savings account, is an easy way to save money for retirement. Contributions are normally deducted from the paycheck and placed into an investment program, where the money can grow and earn dividends over the course of a person's employment. Whether you are making an early withdrawal or waiting until retirement to access this money, here are the steps you need to take in order to withdraw your 401k funds.

Withdrawing 401k Money

Read the terms and conditions of your specific 401k plan. While each employer may have different rules regarding qualifications and allowable amounts for early withdrawals, the standard reasons include hardship, down payment for a home and college tuition. Some 401k plans allow participants to get a 401k loan, borrowing from a percentage of the savings already contributed.

Call or visit the website of the provider handling your 401k account. Most early withdrawals and loans can be done automatically, with very little paperwork involved. If you are requesting a hardship withdrawal, you may also be required to provide proof of the hardship (copies of foreclosure notices, medical bills, etc.).

Request your 401k withdrawal following the specific procedures of your plan. You will need to indicate the amount of your withdrawal (within your plan's allowable limits) and the type of withdrawal (hardship, loan or other).

Select your method of distribution-electronic tranfer to your bank account or by check, mailed to your home. For electronic transfers, you will have to provide your bank account number and routing number.

Review the completed request form to verify that all information is correct before submitting. Once your request is completed and submitted for review it can take up to two weeks to be approved.


  • With certain 401k plans, the interest paid on a 401k loan is typically paid back into your account since you are the lender.


  • 401k loan distributions will become taxable, and subject to penalties, if the loan is not repaid within the specified time period. Loan repayments are made with after-tax funds, so you lose the tax savings while you are in repayment.