---
title: "Distributions FAQs"
date: 2014-09-08
author: "Site Admin"
categories:
  - name: "Uncategorized"
    url: "/category/uncategorized.md"
---

# Distributions FAQs

[![Distributions](http://pinnacle-plan.com/wp-content/uploads/2014/09/iStock-Cash-Stack-300x300.jpg)](http://pinnacle-plan.com/wp-content/uploads/2014/09/iStock-Cash-Stack.jpg)

#### If I terminate employment, when can I get a distribution from the retirement plan?

This will depend on the plan document. Some plans allow for distributions as soon as administratively feasible after termination of employment and others require the participant to wait until the plan year has ended, or even until they have reached retirement age.

#### Will I be taxed on my retirement plan distribution?

If you take your distribution in a lump sum cash payment, you will have mandatory withholding of 20%. The distribution is subject to ordinary income tax; in addition you may also be subject to a 10% early withdrawal penalty. If you roll your money to a qualified retirement plan or an IRA, no taxes apply.

#### Can I roll both pre-tax and Roth money into my traditional IRA?

No. Roth assets can only be rolled into a Roth IRA or another retirement plan that allows Roth deferrals.

#### Can I rollover only a portion of my distribution?

Yes. You may rollover a portion of a retirement distribution and take the remainder as a lump sum distribution. The portion that is not rolled over to an IRA (or another qualified plan) will be subject to ordinary income tax and to the 20% mandatory withholding.

#### Can I take a distribution while I’m still employed?

Some plans allow for distributions while still employed. This is called an in-service distribution. Check with the plan sponsor to see if your plan allows for in-service distributions. There will likely be some specific requirements that need to be met to receive an in-service distribution. Distributions of salary deferrals and certain employer contributions are not allowed prior to age 59 ½.

#### What is a hardship distribution?

Hardship distributions are in-service distributions from defined contribution plans that are permissible in the event of financial hardship. More information about hardship distributions can be found [here](http://pinnacle-plan.com/2014/10/hardship-distributions-401k-plans-retirement-plan-update-octobernovember-2014/ "Hardship Distributions from 401(k) Plans – Retirement Plan Update October/November 2014").

#### What happens to my outstanding loan if I terminate employment?

You will have the option to pay back your loan in full or be taxed on the outstanding balance. Some loan policies may allow you to continue to make payments after termination of employment. Check with the plan sponsor at the time of your distribution to discuss your options.