How Do I Withdraw My Retirement or 401k Money from My Merrill Lynch Account?

In a nutshell: Urgent financial needs, like unexpected repairs or medical bills, may prompt you to withdraw funds from your 401(k) or IRA. While this can be a quick solution, it often comes with substantial penalties, especially if you are under 59 1/2. Withdrawals may incur income taxes plus an additional

Introduction

There are a lot of reasons why you might suddenly need to get a lot of money quickly, such as an unexpected home or auto repair, or a big medical bill. If you need money fast, you might be tempted to withdraw money from your 401(k) or from another Merrill Lynch retirement plan. This can be a good move, the cheapest and easiest way to get the emergency money you need. However, you should think carefully before you do so, as significant financial penalties may apply.

What You'll Need

If you take a withdrawal out of your 401(k) before the age of 59 1/2 and no exceptions apply to your case, you may owe federal and state income taxes on it plus an additional 10% federal tax. Exceptions include:Birth or adoption costs up to $5,000Losses due to a natural disaster that has been federally declared a disaster and total $22,000 or lessPermanent disabilityEmergency expenses up to $1,000 in any given yearTerminal illnessDomestic abuse-related costs up to $10,000Insurance premiums for long term care up to $2,500 per yearSimilarly, if you are withdrawing money from an IRA before the age of 59 1/2, you will owe an extra 10% federal tax unless one of the following exceptions apply:Death or disabilityCertain higher-education-related expensesFor certain first time home buyers, up to $25,000Birth or adoption costs up to $5,000Certain medical expenses, especially in the case of a terminal illness

If you want to withdraw money from your 401(k) plan, contact your employer's plan administrator.

If you don't know who that is, talk to your manager or someone in the HR department.
If you want to withdraw money from an IRA, proceed to the next step.

Go to the Merrill Lynch Standing Letter of Authorization page and print out the form.

Merrill Lynch Standing Letter of Authorization page
You will need to have this form completed before you can withdraw any money.

How Do I Withdraw My Retirement or 401k Money from My Merrill Lynch Account? (Step 2)

Fill out the form, including choosing how you want to receive your money.

Scan or photograph the filled-out form.
This way you have an electronic copy ready for when it is requested.

How Do I Withdraw My Retirement or 401k Money from My Merrill Lynch Account? (Step 3)

Call a Merrill Lynch customer service representative and tell them you need help withdrawing money from your IRA.

Merrill Lynch customer service
The customer service center is open 24 hours a day, 7 days a week.

Conclusion

Carefully read the terms of your plan before you withdraw any money, so you know exactly what terms and penalties apply. You should also consider other options for tapping the resources in your retirement plan, such as taking a loan from the plan, which is an option with fewer penalties in many circumstances. It's also worth asking a Merrill Lynch representative what they think you should do to get the money you need. They may be aware of options you know nothing about.

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