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FAQ #40370

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I'm 31 and need to make an early withdrawal from my retirement plan. How do I do it, and whom do I call?

Related resource areas: Personal Finance


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We are assuming that you mean that you want to make a withdrawal from a tax-deferred employer retirement savings plan such as a 401(k) or 403(b) plan. If this is the case, you will probably need to contact your employer's human resources department or whatever office administers the plan.

Be aware, however, that, since you are under age 59½, any withdrawal that you make will be subject to a 10% penalty plus ordinary income taxes (i.e., taxes due at whatever your marginal tax rate is, such as 15% or 25%). Thus, taxes and the penalty can effectively reduce your withdrawal by 25% to 45%. As an alternative, you might consider borrowing from your retirement savings plan balance. Again, your plan administrator will be able to provide all the details that are specific for your company.

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