With college tuition ever on the rise, many parents look to their retirement savings to assist with university fees. However, using a Roth 401(k) to supplement education expenses may not be as easy as with other retirement plans. Unlike a Roth IRA, there is no simple way to withdraw tax-free funds from a 401(k), Roth or traditional, regardless of the reason for need.

However, all 401(k) accounts do have a built-in loan feature, which can be useful in times of need. Under the terms of the plan, account holders may take a loan of up to 50% of their balance, with a maximum loan amount of $50,000. This loan must be repaid in relatively equal and regular payments within five years, but all repayments including interest are deposited back into the original account. Thus, if tuition costs are not overly burdensome and your retirement savings are robust, a loan can be a relatively simple way to cover education expense without depleting your account.

If a loan will not adequately cover costs, 401(k) plans often include terms for hardship distributions that allow for the withdrawal of funds up to the total amount of contributions, not including earnings or employer matching, as long as the need can be shown to be immediate and heavy. If you meet that criteria, you are eligible to receive a distribution up the amount of the need, including funds to cover additional taxes or fees. However, meeting the criteria for a hardship distribution requires that you be deemed unable to meet the need yourself through your other assets, or those of your spouse or dependents, and that you have exercised all other aid and loan options through this and any other plan under your name. In addition, hardship distributions from a traditional 401(k) are subject to income tax - though Roth distributions are not - and any withdrawal may be subject to the 10% early distribution tax. Account holders who take hardship distributions are also restricted from making contributions to any retirement account under the same employer for at least six months following the withdrawal.