How Do You Do A 401K Hardship Withdrawal For Medical Expenses?
Everything I am about to tell you might be wrong, but I doubt you’ll find a better effort on the internet or anyplace else trying to explain the ins and outs of 401k withdrawals for medical expenses. This information is for anyone who is expensively sick and needs money before retirement. Be sure your medical expenses will exceed 7.5% of your income. Remember you can only deduct expenses after that 7.5% mark. Do some calculations ahead of time to be sure you’ll have a deduction. Remember to add the withdrawal funds to your total income too before you calculate the 7.5%. The IRS will count any withdrawal as part of your income before deductions. So, as a rough example, if you make $50k and then withdraw $30k for expenses, your medical expenses have to be more than 7.5% of $80k. Charge first, withdraw second. One of the things I wish I had done in hindsight was to charge my expenses and then make the 401k withdrawal. This makes it easier to control receipts and avoids any potential ‘over
