The Microsoft 401(k) Plan is designed to help you save for retirement. However, life can bring unexpected expenses and financial challenges, so if a 401(k) Loan is not an option for you, there may be in-service withdrawal options to help you access the funds you need.
In-service withdrawals allow you to access money from your 401(k) account while you are still employed. There are specific circumstances under which you can make these withdrawals, and it's important to understand the guidelines and implications. Be sure to review the Summary Plan Description and the Special Tax Notice Regarding Plan Payments before requesting a withdrawal.
You can withdraw all or any portion of your 401(k) account after you reach age 59½. This money can be withdrawn in cash, rolled over to another 401(k) Plan or IRA.
You can withdraw all or a portion of your 401(k) rollover balance (money you rolled into the plan from another source). The withdrawal can be in cash, rolled over to another 401(k) Plan or IRA, or converted to Roth via an in-plan conversion.
You can withdraw any or all of your 401(k) after-tax balance. This money can be withdrawn in cash, rolled over to another 401(k) Plan or IRA, or converted to Roth via an in-plan conversion.
If you are experiencing a financial need related to specific reasons (as outlined by the Internal Revenue Service (IRS)), you may be allowed to take a hardship withdrawal from your 401(k) account. This money must be withdrawn in cash and is not eligible to be rolled over to another 401(k) Plan or IRA. A minimum 10% income tax withholding applies and if you’re under 59 ½, you may be subject to a 10% early withdrawal penalty. The withdrawal cannot exceed your immediate financial need. Eligible hardship reasons include:
Important Note: Fidelity Investments reviews and processes hardship withdrawals according to IRS rules and tax regulations. Apply for a hardship withdrawal online at Fidelity NetBenefits or call (888) 810-6738. Details about the required supporting documentation are available when you apply online or by calling Fidelity. See the Summary Plan Description for additional details about hardship withdrawals.
To receive your withdrawal through an electronic funds transfer (EFT) instead of a check, establish EFT before requesting a withdrawal. The setup process is generally completed and validated in 15 days. Note: EFT cannot be set up with international banks.
To request a withdrawal, go to Fidelity NetBenefits, or call Fidelity at (888) 810-6738. Note that transactions involving Microsoft stock are charged a $0.01-cent-per-share (capped at $19.95 per transaction) trading fee. Once Fidelity receives your application and required documentation, you should receive your funds within 3-5 business days (for EFT) or 7-10 business days for a check.
A federal income tax withholding of 10% will be deducted from your withdrawal. You may also be subject to a 10% early withdrawal penalty if you are not yet age 59½.
If you want to withdraw or assign all or a portion of your 401(k) account to your spouse or ex-spouse, a Qualified Domestic Relations Order (QDRO) is required. The Fidelity QDRO Center enables you to create a QDRO for the Microsoft 401(k) Plan. You can create a QDRO online at the Fidelity QDRO Center or manually by sending a court-executed and certified copy of the QDRO to Fidelity Important Note: There are fees associated with creating a QDRO, so be sure to review the QDRO Guidelines and Procedures prior to initiating one.
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