You've worked hard to build your Nationwide 401(k) nest egg, and now the time has come, or circumstances demand, that you access those funds. While it might seem as simple as just "taking money out," navigating the world of 401(k) withdrawals can be complex, involving various rules, tax implications, and potential penalties. But don't worry, we're here to guide you through every step of the process, ensuring you make informed decisions about your financial future.
So, are you ready to unlock the value of your retirement savings? Let's begin!
A Comprehensive Guide to Taking Money Out of Your Nationwide 401(k)
Understanding how to access your Nationwide 401(k) funds is crucial. Whether it's for retirement, an emergency, or another life event, knowing the options, procedures, and potential consequences will empower you.
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| How To Take Money Out Of Nationwide 401k |
Step 1: Understand Your Eligibility and the Type of Withdrawal You Need
Before you even think about forms, the first and most critical step is to determine why you need to withdraw funds and if you're eligible. The rules for taking money out of a 401(k) vary significantly based on your age, employment status, and the reason for the withdrawal.
Sub-heading: Are You Over 59 ½? The Easiest Path
If you've reached age 59 ½ or older, congratulations! This is generally the most straightforward scenario. You can typically take withdrawals from your Nationwide 401(k) for any reason without incurring the 10% early withdrawal penalty from the IRS. Regular income taxes will still apply to pre-tax contributions and earnings.
Sub-heading: Still Working? In-Service Withdrawals
If you are still employed and wish to access funds, your options might be more limited. Some plans allow "in-service" withdrawals for specific circumstances, but this is less common and often restricted. You'll need to check your specific plan document or contact Nationwide directly to see if your plan allows this.
Sub-heading: Left Your Job? Post-Employment Distributions
If you've left your employer who sponsored the 401(k), you generally have more flexibility. You can:
- Leave the money in your Nationwide 401(k) (if the balance meets the plan's minimum).
- Roll it over to an IRA or a new employer's 401(k).
- Take a direct cash distribution.
Sub-heading: Under 59 ½? Beware the Early Withdrawal Penalty!
If you are under age 59 ½, withdrawing funds from your 401(k) is considered an "early withdrawal" by the IRS. Unless a specific exception applies, you will face a 10% early withdrawal penalty on top of your regular income taxes. This can significantly reduce the amount you receive.
Common exceptions to the 10% early withdrawal penalty include:
- Hardship Withdrawals: For immediate and heavy financial needs (see Step 2).
- Separation from Service at Age 55 or Later: If you leave your employer in or after the year you turn 55, withdrawals from that employer's plan may be exempt from the penalty.
- Disability: If you become totally and permanently disabled.
- Medical Expenses: If you have unreimbursed medical expenses exceeding a certain percentage of your adjusted gross income.
- IRS Levy: If the IRS levies on your plan.
- Qualified Domestic Relations Order (QDRO): For payments to an alternate payee due to divorce or legal separation.
- Qualified Disaster Distributions: For expenses related to certain declared disasters.
- Birth or Adoption Expenses: Up to $5,000 within a year of birth or adoption (new under SECURE Act).
It's crucial to understand these exceptions, as they can save you a significant amount in penalties.
Tip: Scroll slowly when the content gets detailed.
Step 2: Explore Your Nationwide 401(k) Withdrawal Options
Once you understand your eligibility, it's time to consider the various ways you can access your funds from Nationwide. Each option has different implications for taxes and your future retirement savings.
Sub-heading: Direct Cash Distribution (Withdrawal)
This is the most straightforward way to "take money out." You receive the funds directly as a check or direct deposit.
- Pros: Immediate access to funds.
- Cons: Taxable as ordinary income, and if you're under 59 ½, potentially subject to the 10% early withdrawal penalty. You also lose the potential for future tax-deferred growth.
Sub-heading: Hardship Withdrawal
As mentioned, Nationwide, like other 401(k) providers, offers hardship withdrawals for immediate and heavy financial needs where you have no other reasonably available resources to meet the need. The IRS defines specific qualifying events for hardship withdrawals, which typically include:
- Expenses for medical care for you, your spouse, children, or dependents.
- Costs directly related to the purchase of a principal residence (excluding mortgage payments).
- Tuition, related educational fees, and room and board expenses for the next 12 months of post-secondary education for you, your spouse, children, or dependents.
- Payments necessary to prevent eviction from your principal residence or foreclosure on your mortgage.
- Burial or funeral expenses for your parent, spouse, children, or dependents.
- Expenses for the repair of damage to your principal residence that would qualify as a casualty deduction.
- Expenses and losses incurred on account of a FEMA-declared disaster.
Important: Hardship withdrawals are taxable and typically subject to the 10% early withdrawal penalty if you're under 59 ½ (unless another exception applies). Also, you cannot repay a hardship withdrawal, and you might be suspended from making contributions to your 401(k) for a period. You will need to provide supporting documentation to prove the hardship.
Sub-heading: 401(k) Loan
Instead of withdrawing, you might be able to borrow from your Nationwide 401(k). This is generally limited to 50% of your vested account balance or $50,000, whichever is less.
- Pros: No taxes or penalties if repaid on time, and you pay the interest back to yourself (into your own 401(k) account).
- Cons: The money is no longer invested and growing, and if you leave your job or fail to repay the loan, the outstanding balance can be treated as a taxable distribution and subject to penalties.
Sub-heading: Rollover to an IRA or New 401(k)
This is often the recommended option if you've left your employer and don't need immediate access to the funds.
- Direct Rollover: The funds are sent directly from Nationwide to your new IRA or 401(k) provider. This avoids taxes and penalties at the time of transfer.
- Indirect Rollover: You receive a check for your 401(k) balance, and you have 60 days to deposit it into a new retirement account. If you miss the 60-day window, the funds become taxable and potentially subject to penalties.
- Pros: Maintains the tax-deferred status of your savings, allowing continued growth. Avoids immediate taxes and penalties. Offers more investment flexibility with an IRA.
- Cons: Doesn't provide immediate cash.
Step 3: Gather Necessary Documentation and Information
Once you've decided on your withdrawal strategy, you'll need to prepare. Having all your information handy will streamline the process.
- Your Nationwide 401(k) Account Information: Account number, plan name.
- Personal Identification: Social Security Number, date of birth, current address.
- Beneficiary Information (if applicable): Names, SSNs, and dates of birth of any beneficiaries.
- Reason for Withdrawal: Be prepared to state the specific reason for your withdrawal (e.g., retirement, separation from service, hardship).
- Supporting Documentation for Hardship Withdrawals: Medical bills, purchase agreements, eviction notices, funeral invoices, etc. (as outlined in Step 2).
- Tax Withholding Preferences: You'll need to indicate how much federal and potentially state income tax you want withheld from your distribution. If you don't elect otherwise, 20% federal income tax is often withheld for eligible rollovers not directly rolled over. For non-eligible rollovers (like hardship withdrawals), 10% federal tax is typically withheld unless you elect otherwise.
- Banking Information: For direct deposit (account number, routing number).
Step 4: Contact Nationwide Retirement Solutions
Nationwide's customer service or online portal will be your primary point of contact for initiating a withdrawal.
Sub-heading: Online Account Access
Many Nationwide 401(k) participants can initiate certain types of withdrawals directly through their online account. Log in to your Nationwide Retirement Solutions account. Look for sections like "Manage Account," "Withdrawals," or "Distributions."
Tip: Pause, then continue with fresh focus.
Sub-heading: Phone Support
If you prefer to speak with someone, or if your desired withdrawal type isn't available online, call Nationwide's customer service.
- Nationwide Retirement Solutions: 1-877-677-3678 (Monday-Friday 8 a.m. - 11 p.m. ET, Saturday 9 a.m. - 6 p.m. ET).
- Savings Plus (for California State employees): 1-855-616-4776 (Monday-Friday 5 a.m. – 8 p.m. PT).
When you call, clearly state your intent to withdraw funds from your 401(k) and the reason for the withdrawal. They will guide you on the specific forms and procedures required for your situation.
Sub-heading: Requesting the Correct Forms
Nationwide has specific forms for different types of withdrawals. You'll likely need a "401(a)/403(b)/401(k) Plan Distribution Request Form" or a "Hardship Withdrawal Booklet" if applicable. These can usually be found on the Nationwide Retirement Solutions website under their "Forms" section, or they can be mailed to you.
Step 5: Complete and Submit the Withdrawal Form
This is where all your gathered information comes into play. Read the form carefully and fill out every required section accurately.
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Sub-heading: Personal and Account Information
Ensure your name, address, Social Security Number, and Nationwide 401(k) account number are filled in precisely as they appear on your records.
Sub-heading: Withdrawal Type and Amount
Clearly indicate the type of withdrawal (full, partial, hardship, loan, rollover). Specify the exact amount you wish to withdraw, whether it's a specific dollar figure or a percentage of your balance.
Sub-heading: Tax Withholding Instructions
This is a critical section. You will be asked to elect your federal income tax withholding and potentially state tax withholding. If you choose not to withhold enough, you could face a hefty tax bill when you file your income taxes. Consider consulting a tax advisor here.
Sub-heading: Payment Method
Choose how you want to receive your funds: direct deposit or a mailed check. Direct deposit is usually faster and more secure.
Sub-heading: Sign and Date
Make sure you sign and date the form where required. An unsigned form will be rejected and delay the process.
Tip: Read at your own pace, not too fast.
Sub-heading: Attach Supporting Documentation (If Applicable)
For hardship withdrawals, ensure all required documentation is attached. Nationwide will review these to determine if your request meets the IRS guidelines for hardship.
Sub-heading: Submitting the Form
Nationwide typically offers a few ways to submit completed forms:
- Online Upload: Many forms can be uploaded directly through your Nationwide online account.
- Fax: 1-877-677-4329
- Standard Mail: Nationwide Retirement Solutions P.O. Box 182797 Columbus, OH 43218-2797
- Overnight Mail: Nationwide Financial 1-LC-F2 1 Nationwide Plaza Columbus, OH 43215-2239
It's highly recommended to keep a copy of all submitted forms and supporting documents for your records.
Step 6: Await Processing and Fund Disbursement
After submission, Nationwide will process your request. The timeframe can vary depending on the type of withdrawal and completeness of your application.
- Processing Time: Generally, it can take anywhere from 7 to 10 business days for the entire process, from application to receiving funds. Hardship withdrawals might take longer due to the review of supporting documents.
- Confirmation: You may receive a confirmation email or letter from Nationwide once your request has been received and is being processed.
- Fund Disbursement: Once approved, funds will be sent via your chosen method (direct deposit or check).
Step 7: Understand Tax Implications and Keep Records
Receiving money from your 401(k) has tax consequences.
- Taxable Income: All pre-tax contributions and their earnings are considered ordinary income in the year you withdraw them.
- 10% Early Withdrawal Penalty: If you are under 59 ½ and no exception applies, be prepared for this additional penalty.
- State Taxes: Many states also tax retirement distributions.
- Form 1099-R: Nationwide will send you a Form 1099-R in January of the following year, detailing the distribution you received. You'll need this form to file your income taxes.
- Keep Records: Maintain copies of all correspondence, forms, and statements related to your withdrawal for your tax records.
Consulting with a qualified tax advisor is highly recommended before and after making any significant withdrawal from your 401(k) to understand the full tax impact on your personal financial situation.
Related FAQ Questions
Here are 10 frequently asked questions about withdrawing money from a Nationwide 401(k):
How to: Access my Nationwide 401(k) account online?
You can typically access your Nationwide 401(k) account by visiting the Nationwide Retirement Solutions website (nrsforu.com or nationwidefinancial.com) and logging in with your username and password.
How to: Determine if I'm eligible for a hardship withdrawal from Nationwide?
To determine eligibility, you must have an immediate and heavy financial need, and you must have exhausted all other reasonably available resources. The specific qualifying reasons are defined by the IRS and include things like medical expenses, home purchase costs, and tuition fees. You'll need to provide documentation to Nationwide.
QuickTip: Every section builds on the last.
How to: Avoid the 10% early withdrawal penalty on my Nationwide 401(k)?
The best way to avoid the penalty is to wait until age 59 ½ to withdraw funds. Other exceptions include separation from service at age 55 or later, qualified disability, certain unreimbursed medical expenses, and qualified disaster distributions, among others.
How to: Roll over my Nationwide 401(k) to an IRA?
You can initiate a direct rollover by requesting Nationwide to send your funds directly to your chosen IRA provider. This is generally done by filling out a "Distribution Request Form" and indicating a direct rollover.
How to: Find the correct withdrawal forms for my Nationwide 401(k)?
The most common distribution forms, such as the "401(a)/403(b)/401(k) Plan Distribution Request Form," can usually be found on the Nationwide Retirement Solutions website under their "Forms" or "Support" sections. You can also request them by calling Nationwide customer service.
How to: Change my tax withholding for a Nationwide 401(k) withdrawal?
The withdrawal form will have a section where you can specify your federal and state tax withholding preferences. You will need to elect your desired percentage or amount.
How to: Get a 401(k) loan from Nationwide?
If your specific 401(k) plan allows loans, you can typically apply for one through your online account or by contacting Nationwide. The amount you can borrow is usually limited to 50% of your vested balance or $50,000, whichever is less.
How to: Contact Nationwide customer service for 401(k) withdrawals?
You can reach Nationwide Retirement Solutions at 1-877-677-3678 (Monday-Friday 8 a.m. - 11 p.m. ET, Saturday 9 a.m. - 6 p.m. ET). For Savings Plus (California state employees), call 1-855-616-4776.
How to: Know if my employer contributions are vested in my Nationwide 401(k)?
Your vesting schedule depends on your specific employer's plan document. You can usually find this information in your Summary Plan Description (SPD) or by contacting your former employer's HR department or Nationwide.
How to: Handle taxes after taking money out of my Nationwide 401(k)?
Nationwide will send you a Form 1099-R in January of the year following your withdrawal, detailing the distribution. You will use this form when filing your federal and state income taxes, as the withdrawal amount (less any non-taxable contributions) will be considered taxable income. It's always advisable to consult a tax professional.
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