I am 30 yrs. Old and working. I am 100% vested in my 401(k) and have had the product for 9 or 10 years. I need to take the money out of the fund and use it for other purposes. There isn't a lot of money in the account (about 5500), and I took out a loan a little over a year ago on it and still owe about 1200 on the loan. So, that would leave me with about 4300 before the 20% fed tax and the 10% penalty. I do realize that I'll take a big hit on those and that is all right with me because I really need the money.
I called the Plan Admin./(schwab) and asked about withdrawing the money. They told me that I can't withdraw the money or close the account. The guy I spoke with said that I could only access the money one of two ways: 1. If I could show hardship (in the form of an eviction notice or a foreclosure) which would make me eligible for about 2900 or 2. if I could show disability, which would make me eligible for about 4300.
My house was already foreclosed on, and with two children, I was forced to move in with my mother, who I'm sure is not going to give me an eviction notice and I am not disabled.
This is MY money (I thought), can they refuse to give it to me? As well, why does the amount I'm entitled to differ with the reason I Need it. Can some one please inform me of my options? Thanks.

Jim

It depends on how your plan is worded. Its possible the plan does not permit in service withdrawals except in the case of hardship.

And its not your money its your retirement money. Because you have not paid taxes on that money the plan has the right under the law to restruct your access to it.

ScottGem is right. Plus, your plan document may state that you are only able to withdraw money every few years and since you just took out a loan you therefore have to show hardship.

Remember, those rules are in place to protect you. As ScottGem said that is your retirement money and you don't want to keep taking loans out against it until there is none left.

Scott,
Thanks for the response. So, what I'm hearing from you is that as long as I'm working for my company, the 401 company can refuse to give me what I elected to put into the account and there is no avenue that I can take to get the money out that I have put in.

Again thanks
Jim

Glindaofoz,

As well, thank you for your in-put. I do understand that these rules were set up to discurage people, such as myself, from taking away from their retirment. The reason I am trying to take out the money is to but a car as mine just died(294xxx miles).
As far as I can see, as my car is the only way I can get to and from work, that would be a hardship, but the policy only recognizes eviction and foreclosure as a hard ship.
Any other thoughts?

You were given a plan document when you signed up for the plan which spelled out what you can and can't do. Its not that they are refusing it's that they can't do anything that is not allowed by the plan provisions.

Is there any thing I can do to change the plan at this point?

YOU can't change the plan. Your employer has the plan set up at the start of the plan year. Chances are that the employer would not allow to have a plan where employees can pull money out at anytime - employers incur charges for those kinds of administrative actions its not in their best action to do so.

I don't think that there is anything else you can do to get funds out of your 401K. You don't have any "rainy day" funds?

You have absolutely no control over the terms of the plan.

No rainy day fund and debt to income too high for a loan, not to mention the foreclosure...