How to Withdraw From a Fidelity 401(k)

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The Fidelity suite of products offer a wide range of services that help individuals do everything from saving for retirement to investing extra money to trade on the stock market. Fidelity manages employer-sponsored 401(k) plans and offers its own self-employed and small business 401(k) plans. Customers with a Fidelity 401(k) can withdraw money from the account, but they should be aware of the tax implications of early withdrawal.

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Methods of Withdrawal

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Fidelity allows account holders to take out money on a one-time basis or set up regularly scheduled withdrawals. For Fidelity self-employed or small business 401(k) accounts, the account holder can request a withdrawal check online through Fidelity's NetBenefits portal, or he can fill out a paper withdrawal request form and mail it in. Other withdrawal options include rolling over to another account, bank wire or electronic funds transfer. Account holders withdrawing from employer-sponsored plans that Fidelity manages do so through the NetBenefits website by clicking on the Loans, Rollovers and Withdrawals link.

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Withdrawal Penalties

If an account holder withdraws money early, she is subject to penalties and taxes, which vary depending on the type of 401(k) account she has. Fidelity self-employed 401(k) and small business 401(k) accounts incur a penalty of 10 percent of the withdrawal amount if taken out before the account holder turns 59½ years old. When she's between 59½ and 70½ years old, the account holder can withdraw for hardship events like disability, termination of employment or plan termination without penalty. The penalties for employer-sponsored accounts vary; typically, the Internal Revenue Service requires Fidelity to withhold between 10 and 20 percent.

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