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Asked 10/7/2009
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Are you able to close a 401K retirement if they are foreclosing on your home Trying to decide what to do about losing my home. Can a 401k be closed out? |
Answer 1/1 - Submitted 10/8/2009
You can't close it.. but you may be able to withdraw..
Ask the administrator if the plan allows for hardship withdrawals.. If it does, you can withdraw the amount needed to prevent foreclosure.. if available.
Be aware, you can usually only withdraw what YOU personally have contributed, no employer match, profit share, or earnings...
You would need to send them proof of the foreclosure, and they would then allow you to withdraw the amount needed--no more than the notice is for.. You will have to pay tax and penalty (if your under 59 1/2) on this ----
If the plan does not allow hardships, it may allow loans.. you would have to pay this back.. but it can help if there is no other option.
That being said... if you are over 59 1/2 you may be able to withdraw if the plan allows for in service withdrawal..
Each plan in unique, with options chosen by your employer... there is no way to know what is allowed at what isn't in your specific plan.. or what if anything you have available....
Call the administrator. I speak to people all day in the same situation, and try to help them if it is allowed. Your HR should also have some knowledge of what is allowed, you wouldn't have to go into detail, but you could ask if hardship withdrawals are allowed...
Best of luck to you!
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