JA: Hello. What do you want help with?
Customer: Thank you for assistance. I am interested in further information about hardship withdrawals from a Traditional IRA
that is the result of a 401K rollover. My specific situation is as follows:
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: I'm 55 years old and have been unemployed as the result of a layoff six months ago. My previous employer's 401K plan was rolled over into an IRA account with the same brokerage firm that managed the 401K. My understanding is that it is at least theoretically possible to withdraw funds from either a 401K or an IRA under hardship conditions as someone who has turned 55 in the same year as having been separated/terminated from employment with potentially minimal tax
penalties. While withdrawing funds from an IRA/401K is certainly not an ideal option, I'm hardpressed for others at this point. I'm just interested in knowing in greater detail any potential pitfalls and penalties. Thanks in advance for any advice you can offer.
JA: Is there anything else important you think the Accountant should know?
Customer: Other than the information I've just provided, the funds from my previous employer's 401K were rolled over into an IRA two months ago. Not certain if this has an impact on options. Thank you!