401(k) Distribution Rules

401(k) Distribution Rules are the regulations that govern when and how participants can withdraw money from their employer-sponsored 401(k) retirement plan. These rules define eligible distribution events—such as retirement, reaching age 59½, separation from service, disability, or death—and outline restrictions on early withdrawals, which may be subject to taxes and penalties. They also cover required minimum distributions (RMDs), rollover options to IRAs or other retirement plans, hardship withdrawals, loan provisions, and taxation of distributions. For employers and plan sponsors, distribution rules ensure compliance with IRS and Department of Labor requirements, while for participants, they determine access to retirement savings and the tax consequences of withdrawals.