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Lucy, Esq.
Lucy, Esq., Lawyer
Category: Employment Law
Satisfied Customers: 28067
Experience:  Former judicial law clerk, lawyer
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Hello, I have a 401k with the home depot. I need a financial

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Hello,
I have a 401k with the home depot. I need a financial boost to get caught up. They show a few reasons you could draw from your 401k, like educational needs, buy new home, unpaid medical exspense, avioding foreclosure. The cost of living keeps going up, but i keep getting 2% pay increases. I am glad to get the increase but it just not keeping up.

Is there any other way to drwa from my 401k the i don`t know about ?

thank you
Hi,

My name is XXXXX XXXXX I'd be happy to answer your questions today. I'm sorry to hear about your situation.

Please note that you are asked to rate my courtesy and professionalism, and not whether the answer supports your legal position. I only receive credit when rated 3 or higher. If for any reason you feel that a low rating is appropriate, please first give me the opportunity to address your concerns by clicking the "reply" tab.

There may be a slight delay in response time, as I may be helping with other questions or I may be away from the computer. I will answer any follow-up questions as soon I can.

Some retirement plans will allow you to take a loan from your 401(k). If you're dealing with multiple high-interest accounts, it could help to borrow enough to pay those accounts off, if you can get a lower interest rate. The payments would be automatically deducted from your paycheck. Contributions are usually suspended until the loan is repaid (including matching contributions). The provisions of the loan usually let a person repay it early, if he is able.

Otherwise, IRS regulations allow an employer to provide a mechanism for making hardship withdrawals from the account. You would have to pay a 20% penalty, and pay taxes on any amounts withdrawn as income. Also, an employer is not required to allow a hardship withdrawal and, if they do, they can specify which circumstances it's allowed to be taken. Generally, a hardship withdrawal must be to meet an immediate and heavy financial need. Here is more information:
http://www.irs.gov/Retirement-Plans/Retirement-Plans-FAQs-regarding-Hardship-Distributions#1

Call the HR Department to see if your specific plan allows any other sort of hardship withdrawals. If not, you may want to look into whether a loan would benefit you, and what type of interest and terms the could give you. That's the best place to start.

Please rate my service before signing out, as this is the only way that I get credit for the time I spend helping you. I hope that you are 100% satisfied - if not, please click "reply" so that we may continue the conversation. Good luck.
Lucy, Esq. and 8 other Employment Law Specialists are ready to help you
Customer: replied 4 years ago.
,THANKS
You're welcome. I hope it works out.
Lucy, Esq. and 8 other Employment Law Specialists are ready to help you
Customer: replied 4 years ago.
I saw different regulation for an IRA,& Roth IRA, is it possible to roll my 401k to an IRA and have access to a portion of the funds ?
Usuaully, your company won't allow you to transfer your 401(k) into an IRA until you leave the company. They're allowed to have that requirement, so, unfortunately, that's probably not an option.

A person can take a premature withdrawal from an IRA, but keep in mind that there is a 10% penalty, and you have to pay taxes on the amount withdrawn.
Lucy, Esq. and 8 other Employment Law Specialists are ready to help you