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Can I take contributions out of a traditional or roth 401(k) before 59 1/2 without penalty?

I'm basically looking for this table and cannot find it anywhere, please let me know if any of the below is incorrect:

--------- Traditional 401k Roth 401K Traditional IRA Roth IRA
Withdrawing Contributions before 59.5 yrs: No, penalty applies No, penalty applies. Only earnings are penalized but contribution & earnings are lumped together here. Solution: Roll over into Roth IRA No, penalty applies Yes no penalty. Must wait 5 yrs if conversion.
Withdrawing Earnings before 59.5 yrs: No, penalty applies No, penalty applies No, penalty applies No, penalty applies
Withdrawing Contributions after 59.5 yrs: Yes no penalty, taxes apply Yes no penalty Yes no penalty, taxes apply Yes no penalty
Withdrawing Earnings after 59.5 yrs: Yes no penalty, taxes apply Yes no penalty Yes no penalty, taxes apply Yes no penalty if account has been open for 5+ years
Income Limits (2024) None None None $161,000
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    While I do not like the way the table expresses it, it does state that penalties apply to traditional 401K contributions. Were you hoping the table was wrong?
    – Pete B.
    Jan 3 at 13:40
  • @PeteB. yes, was looking for the correct answer in those boxes, either "Yes no penalty" or "No, penalty applies"
    – Katsu
    Jan 3 at 20:18
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    There are a lot of nuances. For example, contributions come out first from Roth IRAs, so you can take out contributions without taking out earnings, but you cannot take out contributions from Roth 401k without taking out earnings, though you can get around that by rolling over to Roth IRA.
    – user102008
    Jan 4 at 20:42
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    For withdrawing earnings after 59.5 from Roth IRA, the "no penalty" only applies if a Roth IRA has been open for at least 5 years.
    – user102008
    Jan 4 at 20:44
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    I don't think "Must wait 5 yrs if rollover" is right. There is a penalty for withdrawing taxable conversions within 5 years of the conversion, but conversions are not contributions.
    – user102008
    Jan 7 at 17:43

2 Answers 2

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No, you cannot take contributions out of traditional 401(k) or IRA accounts without penalty. Since it's a pre-tax account, allowing you doing that would let you shift taxes from years of high income to years of low income. The tax deferral is only allowed without penalty if used in retirement (or, more specifically, after the age of 59 1/2).

The reason you can take out contributions without penalty from after tax and Roth accounts is that you've already paid taxes on the money when you earned it and nothing was deferred.

There are specific uses for which you can take distributions without penalty (taxes apply), for example first home purchase. The IRS actually has a nice table here.

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  • I see, I have reflected this in the table above. Do all cells look correct to you?
    – Katsu
    Jan 3 at 4:20
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    For a general case, but there are some edge cases that are not reflected. For example, you cannot withdraw converted amounts from Roth IRA for 5 years even though you paid taxes on them.
    – littleadv
    Jan 3 at 4:22
  • Perfect I remember that. I've added it! Wish I had a beginner's guide like this that can cover 99%+ of cases but literally couldnt find it anywhere on the internet today.
    – Katsu
    Jan 3 at 4:25
  • @Katsu I put a linked to it in my answer. There's already a very nice table the IRS has made for you.
    – littleadv
    Jan 3 at 4:28
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    It applies to conversions (which is a contribution). Specifically, taxable conversions. The rationale is the same: prevent planned shifting of income recognition. For most people 5 years is long enough a period to not be able to plan ahead significant income change expectations.
    – littleadv
    Jan 3 at 4:51
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Some plans will let you borrow money out of your retirement account. But that turns out not to be as attractive as it sounds; the cost is the tax-free growth that money would have returned over that period if left in the retirement account, which often works out to being more than you would have paid if you just got a bank loan. Run all the numbers rather than being distracted by the concept of "paying interest to yourself"; think of borrowing elsewhere as a possible leverage opportunity. Hold this option in reserve for emergencies.

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