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Loans versus withdrawals

What’s the difference? A withdrawal may get you cash, but you’ll likely have to pay taxes and potentially a 10% federal tax penalty, depending on your age. Loans allow you to temporarily borrow money from your account. Loans Withdrawals

Borrowing from the account. Permanently taking funds out of the account.

You repay the amount plus any applicable

interest. Transaction fees may also apply.

Federal and state taxes apply for most

withdrawals. Withdrawal fees may also apply.

You can generally borrow up to 50% of your

vested account or $50,000*, whichever

is less. Some plans require you to borrow at

least $1,000.

* May be further reduced based on loan balances in the prior 12 months. The total of all loans combined can’t be more than $50,000.

Typically, you can only withdraw vested funds.

The exact amount you can withdraw will vary,

depending on plan provisions and market

conditions when the withdrawal is processed.

Loan FAQs Withdrawal FAQs

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