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Charles Schwab 401k, Withdrawal, Fees, and More

While 401k is majorly intended to serve you during your retirement, the money is still yours and you can withdraw it even before the “right” time. All you need to do is go through the right process and before you know it, your money will already be transferred to your account.

This article is all about Charles Schwab 401k withdrawal as well as how to withdraw from your brokerage account. Below, you will find out how they fare in these matters, the withdrawal options available, any withdrawal fees involved and if so, how much the fees are, and everything else you need to know.

Charles Schwab 401k Withdrawal Rules

The rule of thumb simply states that you can only go about your Charles Schwab 401k withdrawal process once you are 59 ½ years and above. Here, you will get your funds and only be charged tax as ordinary income.

Charles Schwab 401k

Otherwise, if you decide to take out your money from the IRA when you are not yet 59 ½, then you will have to suffer a 10% early withdrawal penalty, and still, pay your tax. This penalty percentage could only be waived for;

  • Qualified birth expenses
  • Periodic payments
  • Involuntary distribution
  • Unreimbursed medical expenses
  • First-time purchase of a home (can only be up to a maximum of $10,000)
  • Reservist distribution
  • Qualified adoption expenses
  • Disability or death
  • Health insurance
  • Higher education expenses

Once you reach 72 years, you are required to take the Required Minimum Distributions (RMDs). This is a term used to refer to the withdrawals you make annually, of which if you don’t, you get charged a 50% penalty. Tax applies as ordinary income.

Charles Schwab 401k Withdrawal Options

Charles Schwab 401k withdrawal comes in multiple options. Check out some of them below;

  • You can request a check from your online account.
  • There is an IRA Check Writing option you can use to write your own check (login to your account to access this feature)
  • You can use Schwab MoneyLink to withdraw your funds.
  • You can transfer your RMD (Required Minimum Distribution) funds in-kind to another (Charles Schwab’s or any other) non-retirement account.
  • Walk into a physical Charles Schwab’s branch
  • Call them at 866-855-5635 to request your distribution.
  • You can also submit an IRA distribution form.

Except for going directly into a Schwab branch, you can easily go through most of these processes online. For example to Request a Distribution Form;

  1. Go to login page and fill in the required details. This includes;
  2. Your account number
  3. Account-holders name
  4. Social Security Number (SSN)
  5. A telephone number that can be reached during day time.

Once you confirm that all the details are filled in, you can print the form and send it to them, or send it via email. If you choose to go to their branches, check out their branch-locator page to find a branch near you.

Schwab MoneyLink is also pretty easy to use. First, you need to fill out a form to enroll in the MoneyLink program so you can create a standing authorization that will enable you to transfer money electronically between your account and Schwab Account.

Fill in and print this MoneyLink Electronic Funds Transfer Form to get started. Some of the details you will need to provide on the form include;

  • Your Schwab Account Number.
  • Names on the Account
  • And set up your transfer instructions

Keep in mind that Schwab’s MoneyLink is not for all registered accounts. Some accounts like individual 401k and QRP are not eligible.

How to Withdraw Money from a Charles Schwab 401k Account

We all trade and invest for one major purpose: to enjoy the fruits of our hard work in the end. It doesn’t matter whether you are into short-term trading or long-term investments, a time will come when you want to reap your benefits, and for most, this is the best time of the whole trading process.

So when this time comes, whether you have been making profits or you just want to clear your account, you will need to withdraw money from your brokerage (the trading platform) account.

Now, this doesn’t sound so complicated. However, the process will be different depending on the trading platform you use, methods of withdrawal allowed, and other important things like withdrawal speed and convenience.

Note that withdrawing from a brokerage account is different from Charles Schwab 401k withdrawal. Read on to find out how to go about it.

1) Charles Schwab 401k Withdrawal

So how do you withdraw money from a Charles Schwab brokerage account;

Before anything else, this is one of the most important factors to consider while choosing a trading platform. While it doesn’t seem so much of an important and easy to presume that you will always find your best withdrawal option on just about any platform, it is not always the case.

Charles Schwab allows their clients only one withdrawal option, which is, bank withdrawal. This may be a slight disadvantage over their competitors and traders who offer and would prefer other withdrawal methods. However, there is also a bright side to this and some benefits to consider.

One of the benefits and an essential factor to consider is speed and convenience. Most traders want their money to post in their accounts as soon as it possibly can. With Charles Schwab, you can expect your money in two business days, at most (not unless there is an issue that you might require to solve with their customer representatives).

This is fairly average considering that some withdrawal options will take up to several days to fund the money in your account.

2) Charles Schwab 401k Withdrawal Process

Here is what Charles Schwab withdrawal process looks like;

  1. Sign in to your Charles Schwab account
  2. From the menu, select “Withdraw funds” or “Withdrawals
  3. If you have multiple options, select the account you want to withdraw money from, or your preferred withdrawal option.
  4. Enter the amount you want to withdraw.
  5. In some cases, you may be prompted to add some details on your reasons for withdrawal.
  6. Click “Submit”

Note that you can only withdraw funds from your Charles Schwab account to accounts under your name.

3) Charles Schwab 401k Charges and Fees

We all already know that it is free to deposit money to a brokerage account. However, this is not the same case when you are withdrawing. Methods such as international bank transfers are particularly high in fees. The same goes for wire transfers.

The good news about Charles Schwab is that you will not be charged a single cent on basic transactions via banks. However, you will incur a $25 cost for wire transfers and international bank withdrawals. Unfortunately, they don’t support electronic wallets and debit/ credit card withdrawals.

Finally

The best decision you can ever make is to secure your old age, and Charles Schwab has got you covered. Not only that, but the company also provides a platform where you can invest and trade different assets.

Of all their services, they have ensured to provide their clients with sufficient ways to withdraw their rightfully invested and accumulated funds and benefits. For Charles Schwab 401k withdrawal, there are multiple ways to go about it. Check out the different options discussed above.

This article has also covered how to withdraw your funds from the Charles Schwab brokerage account. Check out the process involved, fees applied, and how long it takes for the funds to be posted in your account.

People Also Ask

Here are some of the most common Charles Schwab 401k withdrawal questions;

How Can I Withdraw My 401k Online?

There are many different ways you can go about a Charles Schwab 401k withdrawal online. All you need to do is log into our account, choose the account you want to withdraw from (if you have more than one), and click on “Withdrawals”. Follow the next prompts to complete the process.

How Long Will It Take to Get Funds in My Account from Charles Schwab 401k?

This depends on the processes you choose to take. They all differ in terms of speed and convenience and the deposit can happen anywhere between the same day the transaction was made to two or three days. This is after you request for RMDs, which typically takes a day to a couple of weeks.

What is the Process of Withdrawing 401k?

The process varies depending on the withdrawal methods. Check out this article for different options.

When Can I Withdraw My 401k?

If you don’t want to incur any penalties and enjoy maximum tax benefits then it is highly recommended to wait until you are 59 ½ and above. Otherwise, withdrawing below that age will cost you a 10% penalty. The tax applies in both cases.