I am questioning whether it is allowed to withdraw 401K $$ by my employer plan with Vanguard. I called and was told that I would have to show proof of pending foreclosure before I could withdraw my 100% vested 401K $$. I see other people have been able to withdraw… with penalties of course. Why is Vanguard telling me I can’t? I would like to withdraw my $$ before my credit gets dragged through the mud by a foreclosure and late payments. Thanks,

This is a matter of the rules of your company. The laws enabling 401K do permit withdrawals and do provide for a hardship withdrawal in order to stave off foreclosure 9among other reasons). If you qualify for a hardship then the 10% penalty is waived, but you are still responsible for the taxes on the withdrawn amount.

Some plans do require proof of the hardship before allowing such a withdrawal. This seems to be what Vanguard is telling you. If you have any question you need to contact your company's benefits person.