Hardship Withdrawal for Medical Expenses

• Withdraw funds from your 401(k) if you have large medical bills you cannot pay any other way. The amount you withdraw must be enough to pay off medical bills in full. This is considered a "safe harbor" category by the Internal Revenue Service, meaning you can ask for money from your 401(k) for medical bills without too much scrutiny.
  
  

Education Expenses

• Ask for a hardship withdrawal to pay for tuition and related education expenses. This can include books, supplies and any other costs you will incur for going to school. You can use the money yourself, or use it for a dependent or even for the beneficiary on your 401(k) account.
  
  

Buying a Home

• Use a hardship withdrawal to get funds to buy a principal residence. The funds may be applied not only to the down payment, but also to closing costs, inspections and other fees associated with the purchase. The residence must be a principal residence. That is, it must be the place you intend to live in.
  
  

Preventing Foreclosure or Eviction

• Withdraw funds from your 401(k) to make payments that can prevent foreclosure or eviction from your home. The Internal Revenue Service seldom questions funds that are withdrawn for this purpose. The funds must be used to make payments and the threat of foreclosure or eviction must be imminent and clear.
  
  

Repairing a Home

• Ask for a hardship withdrawal if you need the funds to repair your home. The home must be your principal residence -- the one you live in full time. You may use the funds for unexpected damage not covered by insurance.
  
  

Burial or Funeral Expenses

• Use the hardship withdrawal process when you need money for a burial or funeral. The Internal Revenue Service recognizes the sudden hardship of a death in the family and allows withdrawal under these circumstances. You can request the proper forms from your 401(k) administrator.