Can I make early withdrawals from my 401(k) account?

Virtually all employers impose severe restrictions on withdrawals of pre-tax or Roth contributions while a person remains employed with the company and is under the age of 59½.

• Many withdrawals permitted before the age of 59½, including withdrawals to pay expenses due to a hardship, are subject to an excise tax equal to ten percent of the amount distributed (on top of the ordinary income tax that has to be paid).
• Certain kinds of withdrawals (see this list) are not subject to this excise tax.
• Internal Revenue Code section 213 may allow a specific amount to be used by the worker for amounts paid during the taxable year for medical care.
• Account owners must begin making distributions from their accounts by April 1 of the calendar year after turning age 70½ or April 1 of the calendar year after retiring, whichever is later.
• The amount of distributions is based on life expectancy according to the relevant factors from the appropriate IRS tables. See these IRS Worksheets.