My husband has a 401(k) account which is 100% vested with an $8,000 balance. We are in foreclosure and need a hardship withdrawal. The investment management company which handles my husband's account says we can't withdraw anything because we have not con

By Denise Appleby AAA
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. What are the implications of a low Federal Funds Rate?

    Find out what a low federal funds rate means for the economy. Discover the effects of monetary policy and how it can impact ...
  2. Does the bank set up an escrow account for the buyer and seller in a home sale?

    Learn about the process of escrow and who is responsible for setting up escrow accounts for the buyer and seller in the purchase ...
  3. How does the bank profit off of escrow accounts?

    Discover the truth behind escrow accounts and the bank's profits. Are these accounts worthwhile or just another way for the ...
  4. Who manages an escrow account?

    Managing an escrow account is a job for a trusted and experienced service provider. Discover the best personal finance solutions ...
RELATED TERMS
  1. Self Invested Personal Pension (SIPP)

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

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

    Elder care, sometimes called elderly care, refers to services ...
  4. Eligible Transfer

    An IRS-allowed movement of assets into or out of an individual ...
  5. Forbearance

    A temporary postponement of mortgage payments.
  6. Leveraged Benefits

    The use – by a business owner or professional practitioner – ...

You May Also Like

Related Articles
  1. Professionals

    Who Wants to be a 401(k) Millionaire?

  2. Professionals

    Are Longevity Annuities in 401(k)s a ...

  3. Stock Analysis

    Can American Capital Agency Maintain ...

  4. Stock Analysis

    How Two Harbors' Derivatives Work?

  5. Stock Analysis

    How Chimera Investment Bear The Brunt ...

Trading Center