Possibly, but each plan is different.

You should contact your Plan Administrator or Human Resources department to obtain a copy of your plan’s Summary Plan Description (SPD).  The SPD will include information about hardship distributions and loans if permissible by the plan.  There may be substantial tax consequences involved with a hardship distribution, so you should contact your financial advisor for further guidance.

Plans may allow hardship distributions for an immediate and heavy financial need. However, many plans restrict hardship distributions to only certain financial situations. Review your Summary Plan Document (SPD) for the reasons allowed under your plan, as well as the account from which it may be distributed.

If your plan permits loans, the maximum amount, by law, that you can borrow is 50% of your vested account balance or $50,000, whichever is less. However, your plan may establish a lower maximum, so be sure to check your Loan Policy.

If a loan is approved, your account must be pledged as security and your spouse may need to give written consent.  Loans must generally be repaid within 5 years by equal payments made at least quarterly (or more frequently if required by the Loan Policy), but a longer repayment may be permitted for a loan used to buy your principal residence.  You can obtain a copy of the Loan Policy from your Plan Administrator.

This article was last updated on March 2, 2012