401K withdrawals and federal taxes (any accountants out there?)

[Trooper]

Demand the SPD, they must provide it. Mine was staight forward, past age 55 and terminated from sevice qualified as a hardship withdrawl with no penalty. Yours may or may not depending on the SPD. If your plan doesn't allow it, you can do a rollover IRA and do a 72t.

I guess the Megacorp I worked for was knowledgeable about all the options.
MRG

I agree with MRG. I checked my SPD today and it allows penalty-free withdrawals between 55 and 59 1/2, if you terminate while age 55 or later.

If your wife's employer doesn't believe you then show them this IRS publication:
401(k) Resource Guide - Plan Sponsors - General Distribution Rules

In the section "Taxes on Early Distributions", under 'Exceptions', it says:
(Distributions) made to a participant after separation from service if the separation occurred during or after the calendar year in which the participant reached age 55.

 

[Tree-dweller]

I agree with MRG. I checked my SPD today and it allows penalty-free withdrawals between 55 and 59 1/2, if you terminate while age 55 or later.

If your wife's employer doesn't believe you then show them this IRS publication:
401(k) Resource Guide - Plan Sponsors - General Distribution Rules

In the section "Taxes on Early Distributions", under 'Exceptions', it says:
(Distributions) made to a participant after separation from service if the separation occurred during or after the calendar year in which the participant reached age 55.

Likewise. I made a couple of withdrawals before 59 1/2 after retirement (age 58). No penalty, just the 20% withholding. (I too am learning I am one of the lucky ones with a well-documented plan.)

 

[Theduckguru]

Crazy world I guess. My 457 plan (401k for public emp) requires 20% tax. My DB has more flexiblity. So when I get to that point, I guess I'll have several dependants for my DB taxes.