401(k) Distributions, Rollovers, and RMDs
A participant request is only the beginning. The plan must confirm a permitted distributable event, vested amount, payment form, consent, tax notice, withholding, rollover eligibility, beneficiary status, and reporting.
Reviewed July 29, 2026 · Source-led practitioner reference
Common distribution routes
| Route | Operational distinction |
|---|---|
| Severance or retirement | Plan terms determine available forms and timing after employment ends |
| Age-based in-service distribution | May be permitted at age 59½ for elective deferrals |
| Hardship distribution | Optional plan feature requiring an immediate and heavy financial need under objective plan standards |
| Plan loan | Not a distribution if administered within applicable amount, term, repayment, and documentation rules |
| Direct rollover | Eligible amount moves directly to an eligible retirement plan or IRA |
| Required minimum distribution | Annual mandatory payment; not eligible for rollover |
Rollovers and withholding
Most eligible rollover distributions can move by direct rollover. If an eligible rollover distribution is paid to the participant, mandatory 20% federal withholding generally applies and the participant ordinarily has 60 days to complete a rollover. RMDs, hardship distributions, and certain other payments are not eligible rollover distributions.
Required minimum distributions
RMDs generally begin for a qualified-plan participant by April 1 following the later of the year the participant reaches age 73 or retires, if the plan permits the still-working delay. A 5% owner generally cannot use the retirement delay. Subsequent RMDs are due by December 31. Designated Roth accounts are not subject to lifetime RMDs for the owner under current rules.
Administration checklist
- Verify identity, event, source, vesting, beneficiary, and marital status.
- Apply the plan’s payment form, consent, and small-balance rules.
- Deliver the current rollover and tax notices.
- Calculate withholding and code Form 1099-R correctly.
- Track returned checks, missing participants, RMDs, and death-benefit deadlines.
Turn reference knowledge into working confidence.
Use this public guide for quick orientation and source review. Inside PrepToPay Benefits, you can study the topic in structured lessons, practice applying it, review flashcards, and track your progress across the broader Benefits curriculum.
Primary sources
- IRS — 401(k) general distribution rules
- IRS — Rollovers of retirement-plan distributions
- IRS — Required minimum distributions
- IRS — Hardships, early withdrawals, and loans
Educational reference only. Plan documents, governing law, agency guidance, and plan-specific professional advice control.
Keep building your retirement-plan operations system.
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