--- title: Are We Too Young to Take Money From Our 401(k)? description: The owner of a 401(k) account must be at least 59 ½ to withdraw money penalty-free in most cases, but there are some exceptions. authors: - name: Elizabeth O'Brien role: Deputy Editor url: https://money.com/author/elizabeth-obrien/ bio: Elizabeth O’Brien is Money's deputy editor. She has covered personal finance for more than 10 years, with a focus on retirement planning and health care. Subscribe to her weekly newsletter, Retire with Money. at_money_since: 2016 articles: 194 covers: - Retirement - Business - Career Advice - Credit - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Personal Finance - Pets - Shopping - Taxes - Technology social: - https://twitter.com/elizobrien former_staff: true published: '2017-01-26T11:00:59.000Z' modified: '2024-05-16T12:10:01.000Z' section: Retirement tags: - 401(k)s - Ask the Expert - required minimum distributions - RMDs word_count: 402 canonical: https://money.com/age-401k-withdrawals-penalty/ type: Article source: structured-blocks --- > **Disclosure:** We research all brands listed and may earn a fee from our partners. Research and financial considerations may influence how brands are displayed. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![piggy bank hit with hammer](https://img.money.com/2017/01/170125_withdrawal.jpg?crop=0px%2C164px%2C2100px%2C1181px&quality=85) **Q: We have a 401(k) retirement account and would like to begin withdrawing money so that our RMDs are smaller at age 70 ½. My wife is 61 and I am only 58 years old. What are the rules for withdrawals when one spouse is not yet 59 ½ years old?** **A:** As you note, tax law generally requires that retirement savers begin withdrawing money from their traditional 401(k) accounts and IRAs at age 70 ½. These required minimum distributions (RMDs), which are taxable, are Uncle Sam’s way of finally getting his hands on money that has grown tax-deferred throughout your working life. Meanwhile, funds withdrawn before age 59 ½ are generally subject to a 10% penalty, unless you qualify for one of a limited number of [exceptions](https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distributions). Taking some withdrawals before you get to 70 ½ can spread the tax burden over a longer period and help you avoid having the RMDs push you into a higher tax bracket. A key question here: Are you the owner of the 401(k) you mention? If so, you’re probably out of luck, says Richard Lavina, co-founder and CEO of Taxfyle, an app that bills itself as Uber for your taxes. Ownership of retirement accounts is individual and the owner must generally reach age 59 ½ in order to withdraw the funds without the 10% penalty, Lavina says. Naming someone a beneficiary on the account doesn’t make him or her co-owner. Another important question: Are you still working for the company? One instance in which you can [pull out money before 59 ½ penalty-free](https://money.com/retirement-withdrawals-age-55-401k-403b/) is if you leave your job in or after the year you turn 55**.** Alternatively, if the 401(k) belongs to your wife, you're good to go. To get a sense of the amount you’d need to withdraw if you waited until age 70 ½, check out this [worksheet](https://www.irs.gov/pub/irs-tege/uniform_rmd_wksht.pdf). One factor to consider in weighing earlier withdrawals is your tax bracket at various points in time. If you are currently working, do you anticipate dropping down a bracket when you stop full-time work? Many retirees do [drop down a tax bracket](https://money.com/cut-taxes-retirement-roth-ira/) in early retirement. If you’re one of them, you’ll pay a lower rate on your withdrawals then than you would now, when you’re still working. One caveat: President Donald Trump has proposed collapsing today’s seven tax brackets into three, and if he gets his plan through Congress your math could change. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/age-401k-withdrawals-penalty/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Retirement", "item": "https://money.com/retirement/" }, { "@type": "ListItem", "position": 3, "name": "401(k)", "item": "https://money.com/401k/" }, { "@type": "ListItem", "position": 4, "name": "Are We Too Young to Take Money From Our 401(k)?" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/age-401k-withdrawals-penalty/#webpage", "url": "https://money.com/age-401k-withdrawals-penalty/", "name": "Are We Too Young to Take Money From Our 401(k)?", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2017-01-26T11:00:59.000Z", "mainEntity": { "@id": "https://money.com/age-401k-withdrawals-penalty/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/age-401k-withdrawals-penalty/#breadcrumb" }, "dateModified": "2024-05-16T12:10:01.000Z" }, { "@type": "Article", "headline": "Are We Too Young to Take Money From Our 401(k)?", "articleSection": "Retirement", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2017/01/170125_withdrawal.jpg?crop=0px%2C164px%2C2100px%2C1181px&quality=85", "width": 1012, "height": 569, "caption": "170125_withdrawal" } ], "author": [ { "@type": "Person", "name": "Elizabeth O'Brien", "url": "https://money.com/author/elizabeth-obrien/", "@id": "https://money.com/author/elizabeth-obrien/#author", "description": "Elizabeth O’Brien is Money's deputy editor. 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