Personal §401(k) / Roth §401(k) Distributions
Traditional §401(k) Accounts
Legend's Personal §401(k) plans allow §401(k) elective deferral assets to be withdrawn without penalty after age 59½.1
Upon withdrawal, ordinary income taxes will apply. Distributions must begin no later than April 1 of the calendar year following the calendar year in
which you attain age 70½. Employer contributions may be withdrawn after you have participated in the plan for 5 years and the assets have been in the
plan for 24 months. A premature distribution penalty may apply if distributions are taken prior to age 59½.1
Roth §401(k) Accounts
Tax-free Roth §401(k) distributions may begin at age 59½.2 While regular §401(k) account distributions are mandatory at age 70½,
Roth §401(k) distributions are not mandatory until the participant’s death if the account is rolled over to a Roth IRA. This strategy enables you to create a
tax-free financial legacy for your heirs. Your Legend Advisor can assist you in completing this task.
1Distributions from a traditional retirement account are subject to ordinary income taxes in the year distributed.
Distributions prior to age 59½ may incur an additional 10% penalty.
2In order for the Roth §401(k) account to be distributed tax-free, it must be funded for a minimum of five years and the account
holder must have attained age 59½. A participant would also qualify for tax-free distributions if the account was held for five years and the
account owner became disabled (under the strict definition of disability of §72(p) of the IRS code). Furthermore, in the event of the account
holder’s death, beneficiaries would receive tax-free distributions if the account was held for at least five years. Otherwise, the distribution would
be treated as part return of principal and part taxable earnings. A 10% premature withdrawal penalty may apply to the earnings.
Legend Equities Corporation and its affiliates do not provide tax or legal information or advice.