401(k)General Distribution Rules

Generally, distributions of elective deferrals cannot be made until one of the following occurs:

  • The participant dies, becomes disabled, or otherwise has a severance from employment.
  • The plan terminates and no successor defined contribution plan is established or maintained by the employer.
  • The participant reaches age 59½ or incurs a financial hardship.

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Limits

In certain circumstances, the plan administrator must obtain the participant’s consent before making a distribution. Generally, consent is required if the participant’s account balance exceeds $5,000. Depending on the type of benefit distribution provided for under the 401(k) plan, the plan may also require the consent of the participant’s spouse before making a distribution. A plan may provide that rollovers from other plans are not included in determining whether the participant’s account balance exceeds the $5,000 amount.

Consent

We can generally help with the notarization of these papers on a case by case basis provided the consenting spouse has proper ID, is fully cognizant of what they are signing and the signer(s) understand that  we may have to attach a loose notarial certificate in case the notary verbiage on the consent document is not up to the state prescribed standard.

We cannot advise on the impact of any legal document so please consult an expert before requesting our services.