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Determine why you need to access your account. If your need for your 401(k) money is immediate and absolute, you can simply withdraw the assets from the account, and within a few days the money will be wired to your bank account or sent to you in a check. Taking a distribution in this way will subject your entire withdrawal to taxation at ordinary income rates, and if you are under the age of 59 1/2, you will owe a 10 percent early withdrawal penalty as well.
Consider a rollover. If you are leaving your employer for any reason, or if you simply do not like the way the 401(k) plan is administered or invested, you can roll over your assets into an Individual Retirement Account (IRA). An IRA possesses the same tax-deferred growth characteristics of a 401(k), but you are free to invest your IRA in most any publicly traded security, unlike in a 401(k) plan where you normally have only a limited selection of mutual funds from which to choose. Additionally, a rollover to
an IRA is both tax- and penalty-free. The downside of such a rollover is that you will no longer receive employer contributions to your account, as you most likely did with your 401(k).
Look at loan options. One of the main advantages of a 401(k) plan is the ability to take loans from the account, generally up to 50 percent of the account value. A loan is not considered a distribution, so you will not have to pay taxes or penalties on the loan, but you will have to maintain a repayment schedule, as with any other loan. With a 401(k) loan, however, you pay the principal and interest back to your own account, rather than to an institution.
Contact your plan administrator. When you have selected your course of action, contact your 401(k) trustee and ask for the appropriate paperwork. Whether you are taking a full withdrawal, requesting a loan or initiating a rollover, you will have to provide information on where you want the money to go, and in the case of a distribution, if you want any taxes withheld.