In-Service Withdrawal

DEFINITION of 'In-Service Withdrawal'

A withdrawal made from a qualified plan account before the holder experiences a triggering event. A triggering event, such as reaching a certain age, or leaving an employer, is often needed to be able to withdraw funds from a plan, such as a 401(k).

BREAKING DOWN 'In-Service Withdrawal'

Some plans, allow for distributions to be made before a triggering event occurs, to make house payments or pay for your children's education. In most other instances, though, these withdrawals would be penalized according to the 10% standard.