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Without a hardship qualification can I still acess part of my $160,000 balance with mass mutual. I realize the penalties involved but I am trying to take care of a few bills so I do not end up in a financial hardship. Mass Mutual has told myself and employer I must qualify for a hardship or cease employment for me to acess my money. Is this true? Thanks WK
Country/State/Province of question: Nebraska Already Tried: My employer has contacted Mass Mutual and was told per the IRS rules no employees may withdrawal money from their 401k without qualifying for a hardship or cease employment even if they want to withdrawal money and pay the taxes and penalty.
That is correct - as long as you are employed with the company - you may not have access to your returement funds.
If that your retirement account - like 401k plan - you generally has several options - assuming you are still work for a company that set this retirement plan:
-- you may qualify for a hardship withdrawal
-- you may qualify for a loan (up to $50,000) that will be paid automatically with each paycheck.
Both - the hardship withdrawal and the loan are not required by the law - but permitted - so that is up to your employer to allow these options - you need to contact the administrator of your retirement plan to verify if these options are available.
Generally, hardship distributions from a 401(k) plan are limited to the amount of the employees' elective deferrals only, and do not include any income earned on the deferred amounts.
If you are no longer employed with the company - you generally may decide either leave your money with the retirement plan or take a distribution or roll funds over to another retirement plan or IRA account.
If you take a loan - that will not considered as a distribution and as long as you will be current with loan payments - there is no tax liability.
The distribution - including hardship distribution will be taxable event - the total distributed amount will be added to your other taxable income plus you may be liable for additional 10% early distribution penalty if you are below 59 1/2
Let me know if you need any help.
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