The basic process depends on your account type and age

How you withdraw money from a Fidelity retirement account depends on whether you have a traditional IRA, Roth IRA, SEP IRA, or employer-sponsored plan like a 401(k). The rules also change based on your age and how long the money has been in the account. Before you withdraw, you need to understand that some withdrawals trigger taxes or penalties, and some accounts have restrictions on when you can take money out without a cost.

The actual mechanics of withdrawing are straightforward: you log into your Fidelity account online, navigate to the withdrawal or distribution section, choose the account and amount, and select how you want the money sent to you. Fidelity can deposit it into a linked bank account, mail a check, or transfer it to another financial institution. The process usually takes one to three business days once submitted.

Key Takeaways

  • Withdrawals from traditional IRAs and 401(k)s before age 59½ typically trigger a 10% penalty plus income tax, with narrow exceptions for hardship, disability, or specific life events.
  • Roth IRA withdrawals work differently: you can withdraw contributions (the money you put in) anytime tax-free, but earnings have age and holding-period rules.
  • Employer 401(k) plans may allow loans or hardship withdrawals that avoid the 10% penalty, depending on your plan's rules.
  • Once you turn 73, you must take required minimum distributions (RMDs) from traditional IRAs and 401(k)s each year, or face a 25% penalty on the amount you should have withdrawn.
  • Fidelity processes most withdrawal requests within one to three business days, but the money may take longer to arrive depending on your bank.

Traditional IRA withdrawals before age 59½

If you withdraw from a traditional IRA before age 59½, you owe income tax on the full amount withdrawn plus a 10% early withdrawal penalty. This penalty applies to the earnings and any pre-tax contributions you made. For example, if you withdraw $10,000 and your tax bracket is 22%, you pay $2,200 in tax plus $1,000 in penalty, leaving you $6,800.

The IRS does allow some exceptions to the 10% penalty. You can withdraw without penalty if you are disabled, if you are a first-time homebuyer taking up to $10,000 lifetime, if you have substantial medical expenses that exceed 7.5% of your adjusted gross income, or if you are paying health insurance premiums while unemployed. You still owe income tax on the withdrawal even when the penalty is waived. Fidelity does not determine whether you may have access to for an exception — you report that on your tax return, and the IRS may ask for proof later.

Roth IRA withdrawals and the contribution vs. earnings distinction

Roth IRAs have a different structure that makes early withdrawals more flexible. You can withdraw the contributions you personally deposited into the account at any time, tax-free and penalty-free, regardless of your age. If you contributed $50,000 over ten years and the account is now worth $70,000, you can withdraw the $50,000 contribution portion without consequence.

The earnings (the $20,000 growth in this example) are subject to the same 10% penalty and income tax if you withdraw before age 59½, unless you meet an exception. There is one additional rule: if your Roth IRA has been open for fewer than five years, you cannot withdraw earnings penalty-free even after age 59½. Fidelity tracks your contribution basis automatically, so when you request a withdrawal, you can see how much of your balance is contributions versus earnings.

401(k) and employer plan withdrawals

Employer-sponsored 401(k) plans are stricter than IRAs. You generally cannot withdraw money before age 59½ without triggering the 10% penalty and income tax, even if you leave your job. However, your specific plan may offer a hardship withdrawal or a plan loan, which are two ways to access money early without the full penalty.

A hardship withdrawal lets you take money out for expenses like medical bills, home repairs, or tuition, but you must prove the hardship and exhaust other resources first. The 10% penalty still applies, though you avoid it in some cases like disability. A plan loan lets you borrow from your own 401(k) balance and repay it over time, usually five years. You pay yourself back with interest, and there is no tax or penalty as long as you repay on schedule. If you leave your job before repaying the loan, the outstanding balance is treated as a withdrawal and taxed accordingly.

If you are age 55 or older and you leave your job, some plans allow you to withdraw from that specific employer's 401(k) without the 10% penalty (though you still owe income tax). This is called the Rule of 55. It does not apply to IRAs or to 401(k)s from previous employers.

Required minimum distributions at age 73 and beyond

Once you reach age 73, the IRS requires you to withdraw a minimum amount from traditional IRAs and 401(k)s each year. This is called a required minimum distribution, or RMD. Fidelity calculates the amount based on your account balance and life expectancy tables published by the IRS. If you do not take the RMD, you owe a 25% penalty on the shortfall (reduced to 10% if you correct it within two years).

Roth IRAs do not require distributions during your lifetime, so you can leave that money untouched. If you have multiple IRAs, you can aggregate the RMD calculation across all of them but must withdraw from each account separately. If you have a 401(k) and an IRA, you calculate RMDs for each type separately and cannot combine them.

Fidelity can set up automatic RMD distributions each year so you do not miss the deadline. The deadline to take your RMD is December 31 each year. If you miss it, contact Fidelity immediately to take the distribution and then file IRS Form 5329 with your tax return to report the missed distribution and request penalty relief if you have a reasonable cause.

How to request a withdrawal through Fidelity online

Log into your Fidelity account on the website or mobile app and navigate to the "Accounts & Trade" section. Find the retirement account you want to withdraw from and look for a "Withdraw" or "Distribution" button. Fidelity will ask you to specify the amount, the date you want the withdrawal processed, and how you want to receive the money.

You can choose to have the funds deposited into a linked bank account, mailed as a check, or transferred to another brokerage or bank. If you choose a bank deposit, provide the account number and routing number. Fidelity will send the money within one to three business days, but your bank may take an additional one to three days to post it. If you are withdrawing from a 401(k), Fidelity may require you to complete a distribution form or may withhold federal income tax automatically (usually 20% for lump-sum distributions).

If you need to withdraw a large amount or have questions about penalties or taxes, you can call Fidelity's retirement services line at 1-800-343-3548. A representative can walk you through the options and explain the tax consequences before you submit the request.

Withholding and tax reporting

When you withdraw from a traditional IRA, Fidelity does not automatically withhold taxes unless you request it. You will owe the tax when you file your return. If you want Fidelity to withhold federal income tax upfront, you can request it during the withdrawal process. The amount withheld is credited against your tax bill for the year.

For 401(k) distributions, Fidelity is required to withhold at least 20% of the distribution for federal income tax if you take a lump sum. If you roll the money into an IRA or another 401(k) within 60 days, you can avoid the withholding. Fidelity will send you a Form 1099-R in January showing the amount withdrawn and taxes withheld. You report this on your tax return.

If you withdraw before age 59½ and do not may have access to for an exception, you also owe the 10% penalty. The penalty is not withheld automatically — you pay it when you file your tax return. Some people owe more tax than was withheld, so it is worth calculating your total tax liability before you withdraw.

Rolling over to another account instead of withdrawing

If you want to move money out of a Fidelity retirement account but avoid immediate taxes, you may be able to roll it over to another IRA or 401(k). A direct rollover means Fidelity sends the money straight to the new account without you touching it, so there is no tax or withholding. An indirect rollover means Fidelity sends you a check, and you have 60 days to deposit it into another retirement account. If you miss the 60-day window, it is treated as a taxable withdrawal.

You can roll a traditional IRA to another traditional IRA or to a 401(k) at a new employer. You can roll a 401(k) to a traditional IRA or to a new employer's 401(k). Roth IRAs can be rolled to other Roth IRAs but not to traditional IRAs or 401(k)s. Fidelity can initiate the rollover for you and coordinate with the receiving institution. This is a good option if you are changing jobs or consolidating accounts.

Frequently Asked Questions

Can I withdraw from my Fidelity IRA without penalty if I need the money for an emergency?

It depends on the type of emergency and your age. If you are under 59½, you can withdraw contributions from a Roth IRA anytime without penalty. For a traditional IRA, you may avoid the 10% penalty if you have a may have access to hardship like disability, substantial medical expenses, or health insurance premiums while unemployed, but you still owe income tax. Fidelity does not determine if you may have access to — you report the exception on your tax return.

What happens if I withdraw from my 401(k) before leaving my job?

Most employer 401(k) plans do not allow withdrawals while you are still employed, except through a hardship withdrawal or a plan loan. A hardship withdrawal triggers the 10% penalty and income tax. A loan lets you borrow from your balance and repay it over time without immediate tax. Check your plan documents or contact your employer's benefits department to see what options are available.

How long does it take to receive my withdrawal from Fidelity?

Fidelity processes most withdrawal requests within one to three business days. If you choose a bank deposit, your bank may take an additional one to three days to post the funds. A mailed check typically arrives within five to seven business days. The exact timing depends on your bank and the withdrawal method you choose.

Do I have to take a required minimum distribution if I am still working?

If you are still employed and contributing to your current employer's 401(k), you may be able to delay RMDs from that plan until you retire, depending on the plan rules. However, RMDs from IRAs and from 401(k)s at previous employers are required at age 73 regardless of whether you are still working. Check with your employer's benefits department about the "still-working exception" for your current plan.

What is the difference between a withdrawal and a rollover?

A withdrawal removes money from the retirement account and makes it taxable income. A rollover moves money from one retirement account to another without triggering taxes, as long as it is completed within 60 days (for indirect rollovers) or sent directly between institutions (for direct rollovers). Use a rollover if you want to move money between accounts; use a withdrawal if you need to spend the money.