Submitted By: Jeff
Answered: March 11, 2016 12:33 pm

At age 59-1/2, can I take distributions from my 401(k) account while still employed at the company with which I have the account?

It depends on your plan. Tax law allows plans to permit “in-service withdrawals” by those who are still employed at the company maintaining the plan. However, plans are not required to offer this option. And if they do, there may be restrictions (e.g., an age higher than 59-1/2 or a certain number of years of participation). If a plan does not allow in-service withdrawals and you still want to take a distribution, see whether you qualify for a “hardship withdrawal” to pay medical expenses, etc. Check with your plan administrator.

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Tax Glossary

Accrual method of accounting

A business method of accounting requiring income to be reported when earned and expenses to be deducted when incurred. However, deductions generally may not be claimed until economic performance has occurred.

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