Hardship Withdrawal

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Dictionary Says

Definition of 'Hardship Withdrawal'

An emergency withdrawal from a retirement plan that may be subject to certain tax or account penalties. In the United States, funds withdrawn prior to the age of 59.5 are typically subject to a 10% Internal Revenue Service (IRS) early withdrawal penalty, as well as standard income taxes.
Investopedia Says

Investopedia explains 'Hardship Withdrawal'

Hardship withdrawals from a retirement plan such as a 401(k) can't be replaced. The money that is withdrawn is permanently removed from the account, and only scheduled future contributions are permitted.

The stiff penalties and criteria for hardship withdrawals are meant to deter investors from using this option except as a last resort. The ability to have money free from future income taxes and capital gains taxes (a trait of most retirement accounts) is an extremely valuable asset, and is necessary for many people to achieve a stable retirement.
Search results for

'Hardship Withdrawal'

  • 401(k) Debit Cards: Taking A Swipe At Your Retirement Savings

    http://www.investopedia.com/articles/retirement/08/401k-debit-card-loan.asp
    This is just another more convenient way to borrow from your plan. But at what cost?

  • Tuition Insurance Takes Sting Out Of Withdrawal

    http://www.investopedia.com/articles/pf/08/tuition-insurance.asp
    ... But just as it may be a hardship for families to come up with the cash ... The size of
    the school, cost of tuition and school's pattern of withdrawal can influence ...

  • Sometimes It Pays To Borrow From Your 401(k)

    http://www.investopedia.com/articles/retirement/08/borrow-from-401k-loan.asp
    ... In this case, the unpaid loan balance is treated similarly to a hardship withdrawal,
    with negative tax consequences and perhaps also an unfavorable impact on ...

  • Retirement Planning For 30-Somethings: Avoiding Withdrawals ...

    http://www.investopedia.com/university/retirement-30/retirement-308.asp
    ... as an in-service withdrawal. Some plans limit the availability of in-service
    withdrawals to cases of employees experiencing financial hardship, which includes ...

  • Introduction To Annuities: Advantages And Disadvantages ...

    http://www.investopedia.com/university/annuities/annuities2.asp
    ... Hardship or Disability - Contract owners who experience a medical or other emergency
    can apply for a partial or total withdrawal under these circumstances. ...

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

    http://www.investopedia.com/articles/retirement/10/paying-off-debt-401k.asp
    ... Determining Withdrawal Eligibility In most cases, you can only withdraw
    elective-deferral ... money from your 401(k) at all or only in hardship situations such ...

  • Exceptions To The 60-Day Retirement Account Rollover Rule

    http://www.investopedia.com/articles/retirement/05/041105.asp
    ... than those described under this article's section "Automatic Waiver for Hardship"
    above. ... rolling over the distributed amount at the time the withdrawal occurred ...

  • Tough Times: Should You Dip Into Your Qualified Plan?

    http://www.investopedia.com/articles/retirement/03/043003.asp
    ... as an in-service withdrawal. Some plans limit the availability of in-service
    withdrawals to cases of employees experiencing financial hardship, which includes ...

  • 3 Common Excuses For Not Contributing To A Retirement Plan

    http://www.investopedia.com/articles/retirement/04/102704.asp
    ... must satisfy certain requirements in order to receive a withdrawal from their ... Some
    plans limit these withdrawals to hardship situations - which could include ...

  • 401(k) And Qualified Plans: Distributions | Investopedia

    http://www.investopedia.com/university/retirementplans/qualifiedplan/qualifiedplan4.asp
    ... Some plans will allow an in-service withdrawal only if the employee experiences
    financial ... A period of 10 years or longer. A hardship distribution; A corrective ...

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