If I’m unemployed, do I have to wait 1 year to access my 401k funds?
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If I’m unemployed, do I have to wait 1 year to access my 401k funds?
I’ve been laid off since 08/25/10 and my savings and unemployment are running out. I’m have trouble finding a job. The group that my My 401k account is with told me that I have to wait a full year to access my funds and there’s no way around it. Is this legal? These funds are the only thing that I have left to fall back on at the moment. I may qualify for emergency unemployment but I don’t know yet. I may find a job and not need the 401k funds. My rent and bills won’t stop just because I’m out of funds. I’m sure there’s someone that can authorize the release of my funds?
Asked on March 7, 2011 under Employment Labor Law, Maryland
Answers:
M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
I am so sorry for your situation. It can be very stressful in trying to juggle finances while unemployed. Why your ex employer is saying this to you about your 401K I do not know. Honestly, one would need to read the plan and the agreements, understand it and understand the laws surrounding 401K plans in order to be able to guide you here. I do understand that certain retirement plans have been taken off the penalty list by the IRA if they are accessed for certain reasons and doing so to live while unemployed may come under that list. I would strongly suggest that you speak with an accountant on the matter and discuss this more fully. Good luck.
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