LONGVIEW, WA – 401(k) and 403(b) retirement plans let you save for retirement while deferring income taxes on the saved money and earnings until withdrawal. Many employers offer 401(k) plans to which you can contribute a percentage of each paycheck.
Many companies even match up to a certain percentage of your contribution. If your retirement plan is a section 401(k) or section 403(b), you may be able to get your money early if you face financial hardship. To qualify for a hardship withdrawal,
you must prove the following:
However, any withdrawals you make will reduce the funds you have available at
retirement. The IRS may also impose other restrictions. Even if your retirement plan permits hardship withdrawals, distributions received before age 59½ are still subject to the 10% early distribution penalty. The early distribution penalty applies only to taxable amounts. It doesn't apply to amounts rolled over or amounts that are allocated to after-tax investments in the plan or IRA. There are several exceptions to the penalty (for a complete list of exceptions, see IRS Form 5329). For example:
More ways we can help you with Retirement Planning and Investing:
Chris Bryant, MBA, RFC® is the founder & CEO of Bryant Wealth Management, Inc. He wrote the book, Personal Financial Planning, speaks to a wide-range of audiences, and provides financial planning services for individuals and small businesses.
Chris Bryant is an American financial advisor.