topic 401 funds for dental expenses in Retirement tax questions

401 funds for dental expenses

NN23 — Tue, 24 Feb 2026 06:52:41 GMT

I need major dental work done ($6,000) and have money in my 401 that I would like to use. Will I be taxed and/or penalized if I withdraw funds from this account?

Re: 401 funds for dental expenses

AmitaR — Wed, 26 Jul 2023 16:40:37 GMT

Hello NN23,

Thanks for participating in the Ask the Experts Event.

The money you take out from your 401K, will be taxed, but if used for deductible medical expenses, you will not have to pay the early withdrawal penalty.

https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distributions

Hope it helps!

Re: 401 funds for dental expenses

KarenL4 — Wed, 26 Jul 2023 16:42:43 GMT

Hi, NN23,

You say that you need major dental work done ($6,000) and have money in your 401K that I would like to use. You want to know if you will be taxed/penalized.

First, yes, you will be taxed on the 401K money you withdraw if you are withdrawing pre-tax funds (this is the most common type of withdrawal).

Whether you will be penalized or not depends on a few things. First, you can avoid the 10% early withdrawal penalty if you are over 59.5. If you are younger than that, there are reasons you can get an exception to this penalty. Here's an article that discusses those reasons

The article includes a notation that you can avoid penalties on unreimbursed medical expenses in excess of 7.5% of adjusted gross income). So, unless those dental expenses meet that criteria, that may not help you. Please also take a look at the other reasons, you may find something in the article.

Another thing to consider is the possibility of taking a loan, instead of a distribution. Note, if you leave the company you will typically be required to repay the loan, and, if you cannot, it will become a taxable distribution at that time.

Cheer below with a thumbs up if this helps!

Best,

Karen

Re: 401 funds for dental expenses

NN23 — Wed, 26 Jul 2023 16:45:59 GMT

thank you so much for your response. I should have been cleared that I am 69 years old and retired. If possible I would like to avoid taking out a credit card debt, I would. THanks again.

Re: 401 funds for dental expenses

KarenL4 — Wed, 26 Jul 2023 16:48:40 GMT

NN23,

If you are 69 and retired, you will be taxed on the 401K withdrawal) (that was previously put in the account as untaxed (pre-tax) money, but you will not pay a penalty. If you are withdrawing after tax money, you won't be taxed on the w/d, but you will on the earnings.

Good luck with those teeth!

If this answer helps, please cheer with a thumbs up below.

Best,

Karen