I'd like (need) to withdraw (take out a loan) from my 401(k) account as soon as possible. Please let me know what I need to do.
Marvin, The purpose of your 401k retirement plan is to provide for your golden years. There are times, however, when you need cash and there are no viable options other than to tap your nest egg. For this reason, the government allows plan administrators (employers) to offer loans to participants in a 401(k) plan (be aware that the government doesn't require this and therefore it is not always available.) There are certain restrictions and guidelines for withdrawing funds from a 401(k). You will need to contact your employer or review your summary plan description to find out the options available in your specific plan, such as a loan feature, in-service withdrawals after age 59 1?2 or hardship withdrawals. If you are currently employed, these are your only options for withdrawing funds prior to retirement or termination of employment.
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You need to contact Human Resources at your employer. They will provide you with a phone number for the plan administrator. Not all plans have loan provisions, and the plan administrator can advise you. If there are loan provisions you can borrow not more than 50% of your contributions. Keep in mind that typically repayment must be made within 5 years, and if you leave employment, you will likely be in default of your loan, with the ensuing taxes and penalties.
Depending on your situation, you may be able to get a ‘Hardship Withdrawal’. A loan needs to be paid back; a withdrawal does not, though there may still be taxes and penalty. Some Hardship Withdrawals such as unreimbursed medical expenses in excess of 7.5% of adjusted gross income are penalty free, but not income tax free.
Your 401(k) is intended for retirement income. Life sometimes throws a curve ball, and loans are intended as a last resort. I would recommend you consult with a local CFP® with the hope of developing a financial plan.