How to Get Approved for Hardship Withdrawal

Facing financial hardship? Learn the steps to get approved for a hardship withdrawal from your retirement account. Tapping into your retirement savings is a big decision. Ideally, you want your retirement funds to grow untouched until you reach your golden years. However unforeseen circumstances can cause financial hardship, making a hardship withdrawal from your retirement account a tempting option.

How to Get Approved for Hardship Withdrawal

This article will guide you through the process of getting approved for a hardship withdrawal, including the qualifications, steps involved, and frequently asked questions.

What is a Hardship Withdrawal?

A hardship withdrawal allows you to access funds from your retirement plan, like a 401(k) or IRA, before reaching retirement age (typically 59 ½) due to a financial hardship. It’s important to understand that hardship withdrawals come with tax implications and can hurt your long-term retirement goals.

There are two key things to remember:

  • Not all plans allow hardship withdrawals. Check your plan documents or contact your plan administrator to confirm eligibility.
  • The IRS defines what qualifies as a hardship. Meeting these qualifications is crucial for getting approved.

Qualifying for a Hardship Withdrawal

The IRS defines specific qualifying hardships for a withdrawal. These include:

  • Medical expenses: Unreimbursed medical costs exceeding a certain percentage of your adjusted gross income (AGI).
  • Funeral expenses: Costs associated with burial or cremation of a spouse or dependent.
  • Foreclosure or eviction: Preventing the foreclosure of your primary residence or eviction from your rental home.
  • Repairing primary residence: Essential repairs to your main residence due to casualty loss (fire, flood, etc.).
  • Higher education expenses: Costs of qualified educational expenses for you, your spouse, child, or grandchild.

Tax laws are subject to change.  Consult with a tax advisor for the most up-to-date information on qualifying hardships and tax implications.

Requirements and Application Process

The specific requirements for a hardship withdrawal will vary depending on your retirement plan. Here’s a general breakdown of the process:

  • Contact your plan administrator: They will provide the necessary forms and specific hardship qualifications for your plan.
  • Gather documentation: Proof of your hardship is crucial. This could include medical bills, invoices, repair estimates, eviction notices, etc.
  • Complete the application form: Provide accurate and detailed information about your financial situation and hardship.
  • Submit your application: Return the completed application and supporting documentation to your plan administrator.

Maximizing Your Chances of Approval

  • Clarity and Documentation: Provide clear and concise explanations of your hardship and gather strong supporting documentation.
  • Minimize Withdrawal Amount: Only request the minimum amount necessary to address the immediate need.
  • Explore Alternatives: Demonstrate that you’ve explored other options like loans, payment plans, or dipping into emergency savings before resorting to a hardship withdrawal.
  • Consult a Financial Advisor: Seek professional guidance to ensure this is the best course of action for your long-term financial health.

What to Know

  • Tax Implications: Hardship withdrawals are typically taxed as income in addition to a 10% early withdrawal penalty (unless you qualify for an exception).
  • Impact on Retirement Savings: Withdrawing funds now reduces your retirement nest egg. Consider the long-term financial consequences.
  • Alternatives to Consider: Explore options like loans from your retirement plan (if available) or borrowing from friends/family before a hardship withdrawal.

Appealing a Denied Withdrawal

If your initial application is denied, you have the right to appeal the decision.  Gather additional documentation or explanations to strengthen your case during the appeal process.


Can I get a hardship withdrawal for any reason?

No, only qualifying events like medical bills or preventing foreclosure will qualify for a hardship withdrawal.

What documents do I need to submit?

The required documents will vary depending on your specific hardship. It usually involves bills, receipts, or legal documents proving your financial hardship.

Will my employer be notified if I request a hardship withdrawal?

In most cases, your employer won’t be informed about the reason for your withdrawal, only that you are taking a distribution.

Are there ways to avoid a hardship withdrawal?

Consider other options like consolidating high-interest debt, exploring payment plans with creditors, or taking a loan from a financial institution.

What if my hardship withdrawal is denied?

You can appeal the decision if you believe it was made in error. You can also look into other financial assistance programs or consider a temporary job to address your immediate needs.

Will I get all my money back in a hardship withdrawal?

No, you’ll only be allowed to withdraw the amount necessary to address your immediate financial hardship.

Are there other ways to access my retirement savings without penalty?

Yes, consider a 401(k) loan (if your plan offers it) or wait until you reach age 59 ½ to avoid the 10% penalty.


A hardship withdrawal can provide much-needed financial relief during a difficult time. However, it’s a serious decision with long-term implications. Carefully assess your situation and explore all alternatives before proceeding. Consulting with a financial advisor is highly recommended to ensure this is the best course of action for your specific financial goals.