A Step-by-Step Guide to 401(k) Hardship Withdrawals
A 401(k) hardship withdrawal may help cover certain immediate and significant financial needs, such as medical expenses, education costs, or preventing foreclosure. However, taking money from your retirement account can have long-term consequences. Depending on your plan and circumstances, the withdrawal may be subject to income taxes and potentially a 10% early-withdrawal penalty if you are under age 59½. Eligibility, limits, and qualifying expenses vary by plan.
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