Ashlea Ebeling
speaker
2,002 appearances
38 recordings
1 series
first heard Jul 2022
last heard Feb 2025
Ashlea Ebeling’s voice in public audio — every appearance, attributed to the second.
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One withdrawal per calendar year, whatever amount you pick for that withdrawal up to the $1,000.
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And then in subsequent years, there's this other kind of crazy rule.
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If you don't repay the money back into the account or through more contributions to your accounts, then there's a three-year waiting period before you can take another $1,000 withdrawal.
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Yeah, that's typical for retirement accounts.
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There are all these other exceptions to the 10 percent penalty for taking money out of retirement accounts that apply, you know, in much bigger dollar amounts like five thousand dollar exception for adoption expenses, for example.
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So they were trying to kind of level the field and it was meant to help low to moderate income Americans who don't have that extra thousand dollars in their savings or checking accounts for an emergency.
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It's faster and cheaper than alternatives like credit cards with high interest, personal loans, or even other ways that you can tap retirement savings.
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On the IRS website, they have the whole list of exceptions to the penalty.
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You can always take it out for any reason.
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from your IRA and pay the penalty.
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And most 401ks allow hardship withdrawals.
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Those are also under limited circumstances, and often you have to wait for your employer to certify your reason.
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Another option is taking a loan from a workplace retirement plan, but those have downsides too, especially if you were to lose your job, then you could potentially default.
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One thing is if your account is small, you can't take out so much that the balance would then be under $1,000.
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So, for example, if you have $1,500 saved, you can only take out $500.
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Then there's another
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detail that says you can't take a second emergency withdrawal during the following three calendar years unless you've repaid the amount you took out or put in at least that amount in new contributions to the retirement account.
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Even though it was passed in the 2022 retirement law, it's just effective January 1st of this year.
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And it's only some of the 401ks that are rolling it out.
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The IRAs, if you call them up,
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Showing 601–620 of 2,002 · page 31 of 101
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