If I retire at age 62 and I have a 401k plan at work, can I take it all out at once, or do companies have only certain times for withdrawal during the year? What does the law say regarding 401k, actual withdrawal time, how much notice must be given in advance to get all that is allowed or all of it?

As you can see I have no knowledge of the 401k plans. Are the companies allowed to make up their own rules?

Please advise me

Thanks;
Aunita :confused:

If you are over 59-1/2 and retired (i.e. left the company) then you are free to withdraw as much as you want, as quickly as you want. This is assuming you have met whatever vesting rules the company may have in the plan - these rules may limit how much of the company match you can take out, but for most plans if you have worked for at least 5-7 years at the same company you are probably fully-vested. You can ask your HR department for the specifics. The only other rule to worry about is that once you reach age 79 there are mandatory minimum withdrawal amounts that you must make.

Whatever amount you withdraw should have 20% withheld for income taxes. Depending on your situation this may not be adequate to fully pay the IRS, especially if you plan on taking out a sizable chunk which could push you into higher tax brackets or cause you to have to pay the Alternative Minimum Tax (AMT). You'll also have to pay state/local income taxes on the withdrawal, so be sure to hang on to enough cash to to pay that.