You can take money out of your 401(k) plan, but there may be a penalty and/or tax consequences. In general, if you take money out of your 401(k) plan before you turn 59 ½, you will have to pay income tax and a 10% early withdrawal penalty.

There are a few scenarios where you may be able to withdraw your money and avoid paying the 10% penalty.

  • If you become disabled

  • If you are retired from the company and are 55 years old, or older

  • If you have significant medical expenses

  • If you are paying for education expenses for yourself, your spouse, or your child

  • If you are using the money to buy your first home

  • If you are called to active duty military service

Keep in mind, the money you take out may still be subject to income tax depending on your situation. It is also important to note that each qualifying exception has specific rules that apply. Your Domain Advisor can help you determine if you may be eligible for one of these exceptions.

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