What is a 401(k) hardship withdrawal?

A 401 (k) hardship withdrawal is a withdrawal from a 401 (k) for an "immediate and heavy financial need." It is an authorized withdrawal, meaning the IRS can waive penalties, but it does not relieve you of your tax responsibilities. Before you tap your retirement savings to cover a large, unexpected expense, check that you're allowed to do so.

How long does a 401(k) withdrawal take?

A hardship withdrawal can take 7-10 business days, which includes a review of your withdrawal application. How Do You Prove Hardship for a 401 (k) Withdrawal? You do not have to prove hardship to take a withdrawal from your 401 (k). That is, you are not required to provide your employer with documentation attesting to your hardship.

Do 401(k) plans allow a hardship distribution?

Many 401 (k) plans allow you to withdraw money before you actually retire to pay for certain events that cause you a financial hardship. For example, some 401 (k) plans may allow a hardship distribution to pay for your, your spouse’s, your dependents’ or your primary plan beneficiary’s: tuition and related educational expenses.