401(k) plan early access: How to avoid penalties
Abstract: Early withdrawals from 401(k) plans are allowed under certain circumstances, but in most cases they’re subject to a 10% penalty — on top of ordinary income taxes. However, if you need to tap retirement funds early, it’s possible to avoid penalties in limited situations. This article looks at hardship withdrawals, the Rule of 55, taking a series of substantially equal periodic payments (SOSEPPs) and other options. A sidebar explains how a change in IRS guidelines makes taking SOSEPPs more attractive.