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Asked 7/28/2010
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What can I use my 401k for? What reasons can I use my 401k ? |
Answer 1/2 - Submitted 8/2/2010
Answer 2/2 - Submitted 8/12/2010
Ok - two questions.
First - I'm assuming that you are still employed with the company that sponsors the plan and you are below the plan's retirement age. If that's true, the plan may allow you to take out a loan up to 50% of the vested balance, not to exceed $50,000.
Also - depending on the circumstances - you may be able to take a hardship withdrawal. Situations such as medical emergencies, risk of losing your house, etc. qualify you for a hardship withdrawal.
Most plans use something called the "Safe Harbor" hardship provision. The Safe Harbor provision requires that you have exhausted all other sources of money from your plan(s) before taking a hardship. So for the second question - if the plan uses the Safe Harbor provisions then you have to take out a loan first.
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