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. Can I take my 401(k) in a lump sum?

    Understand your options as it relates to taking a lump sum distribution from a 401(k) plan, and learn the benefits and disadvantages ... Read Answer >>
  2. How do you withdraw money from your 401(k)?

    Deciding to take a withdraw from your 401k is not a decision that should be made lightly. However, for those who needs funds, ... Read Answer >>
  3. What are the best ways to use your 401(k) without a penalty?

    Learn how to avoid incurring additional tax penalties when using your 401(k) before retirement with hardship distributions ... Read Answer >>
  4. Can I take my 401(k) to buy a house for my children?

    Find out how you can use your 401(k) savings to fund the purchase of a home for your children, including the basics of standard ... Read Answer >>
Related Articles
  1. Retirement

    When a 401(k) Hardship Withdrawal Makes Sense

    If you've exhausted all other avenues, there are ways to withdraw funds before age 59½ – sometimes without the 10% penalty that's usually due.
  2. Investing

    Four 401(k) Benefits You Should Take Advantage Of

    If you’re saving for retirement through your employer, there are certain 401(k) benefits that can make planning for retirement easier.
  3. Taxes

    How 401(k) Withdrawals Work When You're Unemployed

    Unemployed individuals can pursue several options when taking money out of their 401(k), but they should carefully weigh taxes and possible penalties
  4. Retirement

    The Basics of a 401(k) Retirement Plan

    This plan has become one of the most popular retirement options. Here's why.
  5. Retirement

    Your 401(k): Not the Best Emergency Fund

    If you have an emergency and need to access your retirement funds, you may have to pay a penalty if you dip into your 401(k). But there is a better option.
  6. Retirement

    When Paying Off Debt With Your 401(K) Makes Sense

    The experts warn against touching your retirement savings early, but there are situations where it is the best financial decision.
  7. Retirement

    3 Common Excuses For Not Contributing To A Retirement Plan

    If you're not participating in your employer-sponsored retirement plan, there may be some easy solutions.
  8. Investing

    When Paying Off Debt With Your 401(k) Makes Sense

    It can be tempting to use funds from a 401(k) plan to pay debts. But first, it’s important to make sure it’s worth it.
  9. Retirement

    Is Your 401(k) Being Mismanaged?

    401(k) plans managed by the wrong people can be hazardous to your future!
  10. Retirement

    How do you calculate penalties on a 401(k) early withdrawal?

    Find out how to calculate the penalties on early withdrawals from your 401(k), including the impact of the additional 10% tax penalty, vesting and income tax.
RELATED TERMS
  1. Hardship Withdrawal

    An emergency withdrawal from a retirement plan that may be subject ...
  2. 401(k) Plan

    A qualified plan established by employers to which eligible employees ...
  3. In-Service Withdrawal

    A withdrawal made from a qualified plan account before the holder ...
  4. SEC Form ADV-H

    An application for either a temporary or continuing hardship ...
  5. Withdrawal

    Removing funds from an account, plan, pension or trust. In some ...
  6. Tax-Sheltered Annuity

    A type of annuity that allows an employee to make contributions ...
Hot Definitions
  1. Quadruple Witching

    The expiration date of various stock index futures, stock index options, stock options and single stock futures. All stock ...
  2. Co-pay

    A type of insurance policy where the insured pays a specified amount of out-of-pocket expenses for health-care services such ...
  3. Protectionism

    Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local ...
  4. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  5. Demonetization

    Demonetization is the act of stripping a currency unit of its status as legal tender and is necessary whenever there is a ...
  6. Investment

    An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic ...
Trading Center