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401(k) Early Withdrawal Guide

The 401k Early Withdrawal Rules... in Plain English!

401(K) Early Withdrawal Defined - When you take money out of a 401(k) before you reach age 59 1/2, the IRS generally treats it as an early withdrawal and you will have to pay a 10% early distribution tax.

However, there are lots of techniques you can use to legally avoid this 401(k) early withdrawal tax. These tax saving strategies are fully covered in this plain-English guide... available for instant download.

The guide contains the clearest explanation you will find anywhere of the 401(k) early withdrawal rules, as well as numerous examples and tax saving ideas..

How to Avoid 10% Tax on a 401(k) Early Withdrawal

One way to avoid the 401(k) early withdrawal tax is to take substantially equal periodic payments (SEPPs). These are regular 401(k) distributions that always escape the 10% additional tax. This guide tells you everything you need to know about setting up a SEPP plan.

Another way to avoid the the 401(k) early withdrawal tax is to take a loan from your plan. These have lots of pros and cons and are fully covered in the guide.

Another way to avoid the 401(k) early withdrawal tax is to qualify for one of the "exceptions". If the money you withdraw is used for a specific purpose (for example, to pay certain medical expenses) you do not have to pay the 10% tax.

IRAs and 401(k)s qualify for different exceptions and these, again, are all clearly explained in this tax saving guide.