My wife signed a form saying she would not withdraw funds from her 401k until retirementHow can we get her money out of this fund? We are aware of the penalties for earlt withdrawal, we need the money.

I'm not to sure which company her fund is with, so I would say talk to the Rep. Usually they can help you find the easiest way of getting the money. Most funds say don't take out until retirement but they should be able to give you your money. It is yours to begin with.

A 401K plan does not have to offer in service withdrawals. If your wife's plan does not offer them or she signed a waiver that she would not withdraw the funds, then its likely she can't.

Sne no longer works for this company. They are giving us the run-arouind because sh signed this form. Can't we withdraw the money regardlwss, and pay the penalties?

You aren't paying attention. She signed a agreement not to withdraw the money. Without knowing what that agreement says its hard to advise. Normally, when a person leaves the employ of the company they can get a distribution, though subject to penalites. But there may be extenuating circumstances here that required the company to request the waiver of the right to a distribution.