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. What is the difference between a 401(k) plan and a 457 plan?

    Discover how 401(k) plans are privately offered employee retirement plans, while 457 plans are typically available to public ... Read Answer >>
  3. 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 >>
  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 >>
  5. 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 >>
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. 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
  3. Retirement

    The Basics Of A 401(k) Retirement Plan

    This plan has become one of the most popular retirement options. Find out why.
  4. 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.
  5. 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.
  6. 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.
  7. Retirement

    Is Your 401(k) Being Mismanaged?

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

    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.
  10. Financial Advisor

    The 4-1-1 on 403(b) Plans

    These plans resemble 401(k) plans in many respects, but are specially designed for nonprofit entities.
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. Tax-Sheltered Annuity

    A type of annuity that allows an employee to make contributions ...
  6. Withdrawal

    Removing funds from an account, plan, pension or trust. In some ...
Hot Definitions
  1. Applicable Federal Rate - AFR

    Rates published monthly by the IRS for federal income tax purposes. These rates are used to calculate assigned interest charges. ...
  2. Foreign Exchange Reserves

    Foreign exchange reserves are reserve assets held by a central bank in foreign currencies, used to back liabilities on their ...
  3. North American Free Trade Agreement - NAFTA

    A regulation implemented on Jan. 1, 1994, that decreased and eventually eliminated tariffs to encourage economic activity ...
  4. Trickle-Down Theory

    An economic idea which states that decreasing marginal and capital gains tax rates - especially for corporations, investors ...
  5. Derivative

    A security with a price that is dependent upon or derived from one or more underlying assets.
  6. Fiduciary

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