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The key, of course, is to manage your distributions so you don’t outlive your money.
There’s a little-known, but proven way to grow your retirement nest egg safely and predictably.
Basically, you will have to prove you do not have any other money and explain why.
Your reasons must be able to be proven so the HR department can approve your request to withdraw the money early.
Maybe you lost your job and are trying to make ends meet or you had to use your savings on a medical emergency.
They need to collect revenue, and that’s why you’re required to begin taking regular periodic distributions starting on April 1 of the year following the calendar year in which you reach age 70-1/2.Contact your human resources or personnel department to see if they allow hardship withdrawals and what you must do to qualify.A penalty-free withdrawal allows you to withdraw money before age 59-1/2 without paying a 10% penalty. You will still have to pay taxes at ordinary income-tax rates.The alternative is to “self-certify,” which doesn’t require you to disclose your finances.
However, you won’t be able to make new 401K contributions for six months after taking the withdrawal.Under normal circumstances, you cannot withdraw from your 401K until you are 59 ½. In order to qualify, you must prove some type of hardship.