5 things to remember about 401(k) plans

When and how you get the money from your 401(k) plan account

Certain events trigger your ability to receive distributions (payouts) of your elective deferrals from your 401(k) plan account. Distributions can begin if you die, are disabled, have a severance from employment, incur financial hardship, or reach age 59 1/2. When you retire or reach age 70 1/2, you have to start receiving mandatory distributions. How and when you receive the money depends on the language of your plan. The plan may call for a single, lump-sum payment, or require installments made over time, or a combination of both. Early (pre 59 1/2) distributions are permitted in certain circumstances. There is an additional tax penalty imposed on early distributions.