How Do You Avoid A Mortgage Foreclosure With A 401K Hardship Withdrawal?
401(k) plans are retirement plans within the United States that allow employees to save money for when they reach retirement age. Employees (with some employers also contributing funds) have income taken out of their wages tax deferred and put into a 401(k) fund. When the employee reaches retirement age, she can withdraw the funds to use fore retirement and pay income taxes at that time. When hardships such as impending mortgage foreclosure or medical emergencies occur, some consider withdrawing from their 401(k) plan to cover those expenses. Understand the difference between a 401(k) loan and a hardship withdrawal. If you take a hardship withdrawal to avoid mortgage foreclosure, you may be subject to a 10% penalty in addition to owing income taxes. However, if you still are an employee at the company through which you funded the 401(k) plan, you may be allowed to take a loan out penalty free. The loan must be repaid over a length of time specified by the company. Check with your compa
