I am 56 Female who has worked for the same co. for 30 yrs. I have had my townhome on the market now for 1 year. I want to sell but the value of my home has declined over $50,000. In the last 2 years. My townhome is currently valued at about 235,000. Which happens to be close to what I owe. I am fully vested in my 401k and eligible for retirement. My 401k bal. could cover the payoff and payoff my credit card debit as well. But leave me nothing in savings. I would plan to go back to work P/T job to cover expenses until home values improve, and my home sells. Is this a wise choice considering it is getting impossible to cover my current monthly expenses?

I found this from IRS publications:
"However, this additional tax (10% early withdrawal tax) will not apply if the payments are made after your separation from service in or after the year you reached age 55, or if the payments are part of a series of substantially equal payments that are paid over your life."

"Hardship Distribution
Many 401(k) plans allow employees to make a hardship withdrawal because of immediate and heavy financial needs. Generally, hardship distributions from a 401(k) plan are limited to the amount of the employee's elective deferrals only, and do not include any income earned on the deferred amounts. Hardship distributions are not treated as eligible rollover distributions."

How IRS defines hardship? And withdrawal after 55 and retirement?