Before you withdraw the money you have saved in your 401k plans, there are a few things that you should be aware of. All the 401k withdrawals you make when you reach the right age are still taxable just like an ordinary income. But if you withdraw your funds early, you will be faced with additional tax penalties. However, you can be exempted from this penalty if you pass away, become disabled, or if you are 55 years old and got terminated from your job. Withdrawing your funds too early would also mean that you lose the potential growth that your retirement money could have.
Moreover, if you delay in withdrawing your money, you might get additional penalties as well. Thus, once you reach the age of 60 years old, make sure that you withdraw at least the minimum amount in order to avoid deductions and penalties. So aside from knowing the 401k contribution limits, you should also be familiar with the rules and regulations involved in withdrawing these funds.