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What are the tax implications of withdrawing money early from a retirement account? Withdrawing money early from a retirement account comes with a 10 percent tax penalty plus regular income tax on the amount withdrawn. .An early withdrawal normally means taking money from your plan, such as a 401(k), before you reach age 59½ .If you transfer a withdrawal from one qualified retirement plan to another within 60 days, the transfer is a rollover. Rollovers are not subject to income tax. The added 10 percent tax also does not apply to a rollover. There are exceptions, however. The IRS waives the 10% penalty for certain "hardship" withdrawals. Each plan's rules vary (check yours to be sure. |
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