An In-Service Withdrawal occurs when a participant in a qualified, employer-sponsored retirement plan, such as a 401(k), takes a distribution without leaving the employ of the company. Such distributions can occur without penalty after 59 1/2. In-Service Withdrawals under 59 1/2 can be made without penalty under certain hardship conditions or if they establish extreme, documented financial need. In addition, it is noted that not every qualified, employer-sponsored retirement plan allows for such withdrawals.
The respective Plan administrators should be contacted to determine if, and under what circumstances, an In-Service Withdrawal can be made from the employer-sponsored plan. Tax implications should also be considered.