You can check your 401(k) balance online, through the account statements you receive, through your employer, or by calling your 401(k) service provider.
Depending on who administers your 401(k) account, it can take between three and 10 business days to receive a check after cashing out your 401(k). If you need money in a pinch, it may be time to make some quick cash or look into other financial crisis options before taking money out of a retirement account.
There are two main ways: either by logging into your 401(k) provider's site or by calling your company's plan administrator and receiving a balance update over the phone. If you have multiple 401(k)s left from multiple previous jobs, you'll need to perform these steps for each of the accounts you've left behind.
Once the distribution is reviewed and approved, the payment will be processed. Payments are generally received within 7-10 business days for a check; 5-7 business days for direct deposit (if available).
When you leave a job, you can decide to cash out your 401(k) money. Generally, when you request a payout, it can take a few days to two weeks to get your funds from your 401(k) plan. However, depending on the employer and the amount of funds in your account, the waiting period can be longer than two weeks.
Your employer plays a role in administering 401(k) plans and may need to approve withdrawals in certain situations, such as in-service withdrawals or hardship distributions.
The short answer is yes — if you make a 401(k) withdrawal, your employer will know. This is because your employer is responsible for all aspects of offering your 401(k) plan, including hiring the record keeper.
Once your distribution request has been processed, you can typically expect your cash withdrawal within the following timelines: ACH: 2-3 business days. Check: 7-10 business days.
Once you reach 59½, you can take distributions from your 401(k) plan without being subject to the 10% penalty. However, that doesn't mean there are no consequences. All withdrawals from your 401(k), even those taken after age 59½, are subject to ordinary income taxes.
You just need to contact the administrator of your plan and fill out certain forms for the distribution of your 401(k) funds. However, the Internal Revenue Service (IRS) may charge you a penalty of 10% for early withdrawal if you don't roll your funds over, subject to certain exceptions.
Once you submit your hardship withdrawal application, it will be reviewed. Generally this takes less than a day. However, if there are any questions about your application, additional review time may be needed. Typically, this further review takes 5-7 business days.
The administrator will likely require you to provide evidence of the hardship, such as medical bills or a notice of eviction.
There isn't a separate 401(k) withdrawal tax. Any money you withdraw from your 401(k) is considered income and will be taxed as such, alongside other sources of taxable income you may receive. As with any taxable income, the rate you pay depends on the amount of total taxable income you receive that year.
You can withdraw your contributions (that's the original money you put into the account) tax- and penalty-free. But you'll owe ordinary income tax and a 10% penalty if you withdraw earnings (i.e. gains and dividends your investments made inside the account) from your Roth 401(k) prior to age 59 1/2.
When you take a qualified distribution from a 401(k) after the age of 59 1/2, you are taxed at your ordinary income tax rate unless you have a Roth 401(k), which is funded post-tax but allows for tax-free withdrawals.
For traditional 401(k)s, the money you withdraw (also called a “distribution”) is taxable as regular income in the year you take it. (Remember, you didn't pay income taxes on it back when you put it in the account; now it's time to pay the IRS.)
In general, Roth 401(k) withdrawals are not taxable provided the account was opened at least five years ago and the account owner is age 59½ or older.
The IRS allows penalty-free withdrawals from retirement accounts after age 59½ and requires withdrawals after age 72. (These are called required minimum distributions, or RMDs). There are some exceptions to these rules for 401(k) plans and other qualified plans.
A company can refuse to give you your 401(k) if it goes against their summary plan description. If the plan states early distributions and 401(k) loans are prohibited there may be little you can do to overturn their decision.
That is, you are not required to provide your employer with documentation attesting to your hardship. You will want to keep documentation or bills proving the hardship, however.
Hardship distribution for a reason not allowed by the plan
For example, if the plan states hardship distributions can only be made to pay tuition, then the plan can't permit a hardship distribution for any other reason, such as a home purchase.
Under federal law, an employer can take back all or part of the matching money they put into an employee's account if the worker fails to stay on the job for the vesting period.
In addition to owing income taxes, you'll also be required to pay to an additional 10% early withdrawal penalty unless you're over 59 1/2 years old or meet one of the IRS's exceptions, which we'll cover in a moment. Between taxes and the penalty, your cash-out amount could be much less than the value of your 401(k).
Income from a 401(k) does not affect the amount of your Social Security benefits, but it can boost your annual income to a point where those benefits will be taxed.
"It's up to the plan sponsor to decide whether to allow hardship withdrawals," said Kyle Ryan, executive vice president of sales and advisory services at Empower Personal Wealth in Danville, California, in an email.