Expert: Shirley McAllister, CPP, PHR - 8/9/2011

Question
Hello Shirley!

My husband has a 401k that we want to cash out.  The retirement dept told us he cant until he leaves his job (which he has no intentions of doing for awhile).  He can not contribute due to the fact he is a Union member to the account nor does the employer contribute.  We need the money for hardship non medical.  Any suggestions?

Thanks!
Leian

Answer
He can roll it over into an IRA account at a financial institution if he is 59 1/2 or older. It is easier to get the money from an IRA. If he is not 59 1/2 or older he cannot do this.

He may be able to take out a 401K loan from the plan it is easier to get a loan than a hardship withdrawal. The interest is lower, the payment is taken right out of his check and he pays the interest back to himself.

A hardship withdrawal is only allowed in extreme cases and is dependent upon the rules of the plan. There are specific rules and what can be withdrawn and for what reasons it can be withdrawn. He needs to go to HR or the 401K administrator and fill out papers for a 401K hardship withdrawal.

Shirley