hardship withdrawl

[mdvvm]

What is the name of your state? Pennsylvania

I have an old 401k plan from my previous company that is managed by a large company. I am getting dangerously close to having to go bankruptcy or default on a mortgage. Does anyone know if I can make a hardship withdrawl in certain circumstances without sever penalty and taxes?

Thanks.

 

[cbg]

No, you cannot. That is, you cannot do so without a penalty and taxes.

If this is with a previous employer, not your current one, you can cash out the whole thing; it is not necessary to take a hardship withdrawal. In fact, since this is not with your current employer, I believe your only option, if you want part of it, is to take all of it. But there are NO circumstances under which you can take part or all of a 401k plan early without paying taxes, and I was recently made aware that penalties apply to hardship withdrawals as well. So while you can access the money, you will still have to pay penalties and taxes.

 

[Zephyr]

No, you cannot. That is, you cannot do so without a penalty and taxes.

If this is with a previous employer, not your current one, you can cash out the whole thing; it is not necessary to take a hardship withdrawal. In fact, since this is not with your current employer, I believe your only option, if you want part of it, is to take all of it. But there are NO circumstances under which you can take part or all of a 401k plan early without paying taxes, and I was recently made aware that penalties apply to hardship withdrawals as well. So while you can access the money, you will still have to pay penalties and taxes.

I could be wrong, so slap my wrist if you need to, aren't there some items that "lessen" the penalty or the tax when pulling money from a retirement account? such as education or a home? just asking

 

[Beth3]

Nope.

The 10% early withdrawal penalty when someone takes a hardship withdrawal is only waived if it's for a medical emergency or if the participant is 59-1/2 years of age or older.

 

[Zephyr]

gotcha thanks....

 

[acmb05]

You have one more option

You can take out a loan on your 401k. This will have to paid back into it monthly but you will not incur any penalties this way. If I am not mistaken your loan limit is half of what your 401k balance is.

 

[pattytx]

You can take out a loan on your 401k

Assuming, of course, that the plan has such a provision. And if it does, the amount is limited to whatever the plan rules say.

 

[acmb05]

well of course

Assuming, of course, that the plan has such a provision. And if it does, the amount is limited to whatever the plan rules say.

I was only suggesting another alternative to look into.