Sometimes. An employee may have limited withdrawal opportunities while actively employed, depending on the plan. Certain plans allow distributions after reaching a specified age, while others may permit specific types of in-service withdrawals.

A Fidelity 401k hardship withdrawal can be available under some plans when we have an immediate and heavy financial need and satisfy the applicable requirements. However, not every employer's plan offers hardship distributions, and eligibility does not automatically mean that every expense qualifies.

If a withdrawal is available, we should carefully compare it with alternatives such as a Fidelity 401k loan, because taking retirement money out can affect long-term savings and may create tax consequences.

How to Withdraw Money from Fidelity 401K?

When the plan permits a distribution, the process generally begins by reviewing the account and identifying the available transaction options.

1. Sign In to the Fidelity Account

We can sign in to the Fidelity website or use the applicable Fidelity workplace retirement account interface. After locating the 401K, we should review the available distribution, withdrawal, or loan options.

2. Review the Available Withdrawal Options

The account may display several possibilities depending on the employer's plan. These can include a withdrawal, rollover, loan, or other distribution option.

If the withdrawal option does not appear, the plan may not currently permit that type of transaction. We should review the plan information or contact the appropriate workplace retirement representative.

3. Select the Appropriate Distribution Type

We should identify the reason for the withdrawal and select the option that accurately describes the transaction. For example, a plan may distinguish between a normal distribution, hardship withdrawal, rollover, or another permitted distribution.

4. Review Taxes and Withholding

Before submitting a Fidelity 401K withdrawal, we should review the tax information presented during the transaction. A distribution that is taxable can increase our taxable income for the year. An additional early-distribution tax may also apply in some circumstances unless an exception is available.