Early withdrawal of 401k for health insurance ded...
Sign Up

Why sign in to the Community?

  • Submit a question
  • Check your notifications
or and start working on your taxes
Announcements
TurboTax has you covered during Covid. Get the latest second stimulus info here.
cancel
Showing results for 
Search instead for 
Did you mean: 
New Member

Early withdrawal of 401k for health insurance deductibles

I left a company about 2 years ago and want to withdraw my 401k contribution to pay pay for my health insurance deductible. How do go about it without incurring s penalty
2 Replies
Anonymous
Not applicable

Early withdrawal of 401k for health insurance deductibles

assuming even if this would qualify as a hardship distributions, it is a taxable event. To make matters worse, if you are under the age of 59½, you are also subject to the 10% early withdrawal penalty.

 

if you have other funds available,   it might not even qualify as a hardship distribution but just a normal distribution subject to the same penalties and taxes.  

Level 15

Early withdrawal of 401k for health insurance deductibles

Since you are no longer employed with the company, distributions are permitted from the 401(k) without them having to be hardship distributions.

 

Since you are asking about early withdrawals, presumably you are under age 59½.  If you left the company in or after the year your reached age 55, distributions from the company's 401(k) will be exempt from penalty.  Otherwise, distributions used to pay out-of-pocket medical expenses are exempt from penalty to the extent that these expenses exceed 10% of your AGI.

Dynamic Ads
v
Privacy Settings