Help to pay Grandson college expense. Is there no penalty up to $10,000.00 ? On a one time per year withdrawal.

You will pay a 10% penalty on this withdrawal, assuming you are under 59-1/2 years of age, as well as income tax. Needing the funds to pay tuition for yourself, your spouse, your dependent, or your child is considered a "hardship," and under IRS rules your employers 401(k) plan must make money available to you, up to $10K. But being a "hardship" does not mean that it's penalty free.

Note also that paying tuition for a grandchild does not fall into the "hardship" definition unless he's your dependent, so if he's not your dependent it's likely that the plan administrator will deny your request. My advice is forget the withdrawal and take a loan on your 401(k) instead - there's no interest or penalties or taxes, so it's a better deal.

Another option is to roll part of your 401(k) into a rollover IRA, then make the withdrawal from the IRA to pay college tuition.

Payment of college tuition for yourself, your spouse, your children or grandchildren is one of the exceptions that allows you to NOT pay the 10% Early Withdrawal Penalty.

There IS interest on a 401(k) loan, but its interest you pay yourself so the net affect is no interest.

The exception I cited is for IRAs only, which is why the rollover is required.