I lost my job and made very good money, separated from my wife whom practically gets all my retirement from military, I have no other source of income right now, broke except for my 401k, I have a house in another state which I'll lose money on selling right now and my wife has our home in TN which has about 50,000 or more in equity in which she is requesting the house in the divorce, I have my 401k and what money I have left in the bank is going quickly, I have no other source of income. Can I do a loan against my 401k to avoid the penalities or do they have some sort of hardship. I'm going to have to pay taxes as well I'm kind of screwed every which way. Help

Do a loan!

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Originally Posted by ScottGem

Do a loan!

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How does one do a loan on a 401k?

Whoops sorry, I forgot you lost the job. In that case a loan is off the table. You can get a distribution But you will have to pay the 10% penalty plus any taxes due on the distribution.

Someone told me if I took money to pay my mortgage to survive it would be a hardship distribution and I wouldn't have a penalty is that true?

If you use the money to forestall a foreclosure it does qualify as a hardship. Some plans do not permit withdrawals except for hardship. But qualifying for a hardship withdrawal, doesn't usually get you out of the 10% penalty.

So I'll have to pay a 10% penalty if I take a hardship withdrawal to pay my mortgage.

Any other suggestions as to what I could do? Taking money from my 401K seems to be my only option for me to survive. And you know how much unemployment pays not much not enough to pay my bills unfortunately.