What is a hardship withdrawal?

Hardship withdrawal

A hardship withdrawal takes money out of a 401(k) (definition, opens in a new tab) while still working, for an immediate and heavy financial need the plan accepts, like certain medical bills. It's limited to the amount needed. It's taxed as income, may owe the early withdrawal penalty (definition, opens in a new tab), and can't be paid back into the account or rolled over.

Where does this site use it?

• What does cashing out my 401(k) cost?

Related terms

• 401(k)
• Early withdrawal penalty
• Withholding (W-4)

General education, not financial advice.