Methods of Withdrawal
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.
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.