What if I need the money before retirement?

In general, the best solution is to take out an individual 401(k) loan, which uses the accumulated balance of the account as collateral. You can borrow up to half of the total balance on your solo 401(k), as long as the loan doesn't exceed $50,000. The remainder of your balance is still invested in your individual 401(k), with tax-deferred investment earnings growth. Loan payment plans vary by provider.

The alternative is to simply withdraw money from your individual 401(k). If you choose to do so before you are at least 59 ½, you'll typically owe a 10% early withdrawal penalty. You'll also owe income tax on the withdrawal - even if you hold a Roth 401(k). There are exceptions, however. The IRS allows the 10% penalty to be waived for certain "hardship withdrawals" such as burial or funeral expenses or large out-of-pocket medical expenses.