Maybe your 401(k) has grown over the years and you have a large account balance. Most of the time, a participant is able to receive a distribution of the money at termination of employment, but perhaps you would like to do something different with your account while you are employed. What options do you have?

The first option that may be available to you is a plan loan. Generally, you can borrow up to one half of your vested account balance (including your contributions, your vested employer’s contributions and earnings) up to $50,000. The term of the loan is generally limited to five years, although it can be longer if you are using the money to buy your home. Repayment is most often done through a payroll deduction. Doing this means there are less funds in the account invested toward retirement.

Most loans become due immediately on termination of employment. As there is no longer a paycheck to withhold payment from, the balance can be paid off with a personal check, for example. If the loan is not repaid, it will be considered a taxable distribution. There also might be a 10 percent penalty for those younger than 59½.

The second option is a hardship withdrawal, which comes with its own set of rules. This is used for immediate, heavy financial needs. Examples include preventing eviction or foreclosure as well as paying medical bills, certain education costs or funeral expenses. Usually a hardship withdrawal is an option only after the employee has exhausted all other distributions or nontaxable loans available under the plan.

Your particular plan might have allowed for different types of contributions such as pre-tax, Roth 401(k) and after-tax contributions. Some plans will allow the withdrawals of after-tax contributions (nonRoth) at any time. However, your pre-tax and Roth contribution withdrawals are much more restricted. Depending on the plan, the withdrawal of these contributions could be allowed when you reach a certain age, become disabled, as “qualified reservist distributions,” and/or due to hardship.

Some plans allow for the withdrawal of vested employer contributions. Vesting refers to the process in which an employee gains ownership of employer contributions by meeting a period of continued employment. A 401(k) plan can let you withdraw these under circumstances similar to those noted above, such as disability, hardship, specific age or if the contributions have remained in the plan for a certain number of years.

Before taking any withdrawals you will need to consider the tax impact it will have. Typically the pre-tax contributions, employer contributions and earnings are all taxable when withdrawn. The after-tax contributions are nontaxable. If you have both types, each withdrawal will be part taxable and part nontaxable.

Roth withdrawals are a different matter. If your distribution is qualified, meaning that it satisfies a five-year holding period and occurs after 59½ or disability, then the distribution is tax-free.

If you would like to invest your withdrawn funds and allocate them toward retirement, you might consider rolling them into an IRA. By directly transferring the funds from the plan to the IRA, you will avoid the mandatory 20 percent tax withholding. Roth 401(k) accounts can be rolled to a Roth IRA. Note that the time the funds remained in the Roth 401(k) won’t count toward the holding period once the funds are in the Roth IRA. Certain withdrawals cannot be rolled over.

These withdrawal rules give you some options. If you want additional details, the summary plan description for your employer plan provides a good overview of your choices. Be sure to speak with your financial adviser before making any plan withdrawals.

Marc A. Hebert, MS, CFP, is a senior member and president of the wealth management and financial planning firm The Harbor Group of Bedford. Email questions to Marc at mhebert@harborgroup.com. Your question and his response might appear in a future column.