If you experience financial difficulties, it may be tempting to
tap into the savings you have accumulated in a 401(k) or similar
retirement plan. Many plans permit hardship withdrawals, and the
Bipartisan Budget Act of 2018 relaxed some of the rules surrounding
these withdrawals. But, even if it is easier for you to access your
retirement savings in a pinch, doing so comes at a steep price.
How do you qualify?
Retirement plans may, but are not required to, provide for
hardship withdrawals. Typically, these withdrawals are allowed
for:
- Unexpected medical expenses;
- Tuition and related fees and
expenses;
- Costs related to purchasing a
principal residence;
- Payments necessary to avoid eviction
from, or foreclosure on, a principal residence;
