A plan holder can make periodic or complete withdrawals from a Fidelity 401(k) fund if the individual meets the eligibility criteria for such withdrawals, according to Fidelity. However, early withdrawals before age 59 1/2 result in a 10 percent penalty on the distributed amount and are subject to taxation, according to the IRS.
In compliance with IRS guidelines, Fidelity 401(k) plan holders receive the interest from a 401(k) plan when they retire or pass 59 1/2 years of age, according to the IRS. Sudden permanent disability and the death of the plan holder are some of the conditions that permit early withdrawals without penalties. Plan holders may also withdraw excess contributions to the 401(k), according to Fidelity. Fidelity 401(k) plans are also subject to the provisions for hardship withdrawals for urgent financial needs caused by adverse financial circumstances, as stated by the IRS.
Fidelity also permits employed and self-employed 401(k) plan holders to make partial withdrawals from their retirement plans, subject to IRS regulations and fees that govern the withdrawal of funds from the plan, Fidelity reports. The company discourages plan holders from making early withdrawals from 401(k) plans, since they may face a significant loss of compound interest, according to Fidelity.