Distribution

A 401(k) distribution occurs when you withdraw money from your retirement plan. The IRS considers most distributions as taxable income (excluding circumstances such as rollover distributions) and taxes based on applicable tax brackets. Early distributions are ill-advised from retirement accounts because they're highly taxed. At retirement age, individuals are required to take required minimum distributions (RMDs).See also: Qualified Distributions, Required Minimum Distributions, and Rollovers.

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