Retirement Planning/401k withdrawal


My  husband has had a 401k four over 6 years with his present employer.
We have received and paid back 2 loans through payroll withdrawals.
He received info via company e-mail that he will no longer be able to receive health insurance b/c his hours no longer exceed 29.5.
The company cut his hours to 28 per week and he was told the only program he will be able to keep is his 401k.

He does NOT want 401k any more and wants the monies he invested.  Can he just get his money?

Dear Carolyn,

Before I answer your question, I want to address the reason your husband's company reduced his hours. You may already know this, but it amazes me how many people are just finding out.

Due to the mis-named Affordable Care Act, known as ObamaCare, health insurance premiums are being forced higher by Federal Government regulations. Combined with this is the mandate that employers with more than 50 employees must provide health insurance. Without reducing hours to less than 30 hours per week, many companies will become unable to stay in business. These companies would have to raise the prices of their goods and services, in many cases to the point that customers will no longer buy their products.

In addition to the economic consequences of this bill is the moral issue of requiring the approved medical plans to include abortion as a feature of the coverage. Even if a company could afford the premiums, it still might be the decision of the management to drop the health insurance in order to not have to fund death of babies for matters of convenience.

You can help reverse this law by contacting your legislators, and by encouraging your friends and relatives to do so, as well.

To answer your question:

If your husband is under age 59 1/2, to cash out his 401(K) would result in a Federal Premature Distribution Penalty. Depending on what state you are in that could cost you half of the account value. On the other hand, some companies allow employees to do a non-hardship transfer of funds to a self-directed IRA. Under age 59 1/2 this transfer of funds is limited to employer contributions and funds transferred from previous employers' 401(k)s that have been held in separate accounts.

If you want more information, feel free to call me at (888) 792-2379 or e-mail me at

Willard R. Brumbaugh, LUTCF  

Retirement Planning

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Willard R. Brumbaugh, LUTCF


I have answered many questions regarding 401ks, IRAs and annuities as well as life insurance. I have been counselling against most Qualified Plans since 1994.


Ranked in the top 5 in retirement catagories at most of its last 2 1/2 years. Organizations I belong to: National Association of Insurance and Financial Advisors-California
Inland Empire Estate Planning Council

Life Underwriters Training Council Fellow

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