A:


Unfortunately, the conditions under which hardship withdrawals can be made from a qualified plan, including a 401(k) plan, are determined by the provisions in the plan document (as elected by the employer). Some plans will allow hardship withdrawals of all plan assets, while others will limit hardship withdrawals to assets attributed to salary deferral contributions.

You may want to ask the plan administrator or the employer for a copy of the summary plan description agreement (SPD); the SPD will include information about when and under what circumstances withdrawals can be made from your husband's 401(k) account. You can also ask to be provided with an explanation in writing.

If you feel that the information you received is incorrect, don't hesitate to ask to speak with a supervisor. Be sure to ask for information about when your husband would be eligible to receive distributions from the plan

If it's determined that your husband is not eligible to receive distributions from the plan at this time, ask about loan provisions. If the plan allows for loans, your husband may be able to borrow up to 50% of his account balance, or the full $8,000 under certain circumstances.

This question was answered by Denise Appleby
(Contact Denise)

RELATED FAQS

  1. When can benefits be received from a provident fund?

    Find out when participants in provident funds can begin receiving benefits, including how funds can be used to finance important ...
  2. Is Social Security Income a perpetuity?

    Find out why Social Security income is not classified as a perpetuity, including what constitutes a perpetuity and the basics ...
  3. What types of investments are allowed in a provident fund?

    Read about the types of investments allowed in various provident funds around the world, including the Indian, Malaysian ...
  4. How does a provident fund compare to U.S. Social Security?

    Find out how provident funds compare to the U.S. Social Security program, including examples of income limits and contribution ...
RELATED TERMS
  1. Backdoor Roth IRA

    A method that taxpayers can use to place retirement savings in ...
  2. Deficiency Balance

    The amount owed to a creditor if the sale proceeds from the collateral ...
  3. Current Service Benefit

    The amount of pension benefit accrued by an employee who had ...
  4. Self Invested Personal Pension (SIPP)

    A tax-efficient retirement savings account available in Great ...
  5. Total Annual Loan Cost (TALC)

    The projected total cost that a reverse mortgage holder should ...
  6. Elder Care

    Elder care, sometimes called elderly care, refers to services ...

You May Also Like

Related Articles
  1. Retirement

    Does it Make Sense to Have an MLP in ...

  2. Stock Analysis

    When Will Google Get Its Mojo Back?

  3. Retirement

    Top Tips for Rebalancing 401(k) Assets

  4. Professionals

    Few Target-Date Managers Invest in Their ...

  5. Fundamental Analysis

    Should You Hire an Advisor or DIY Your ...

Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!