401k Hardship Withdrawal

What if your employer doesn’t offer 401k loans or you are not eligible? It may still be possible for you to access cash if the following four conditions are met (note that the government does not require employers to provide 401k hardship withdrawals, so you must check with your plan administrator):

1. The withdrawal is necessary due to an immediate and severe financial need
2. The withdrawal is necessary to satisfy that need (i.e., you can’t get the money elsewhere)
3. The amount of the loan does not exceed the amount of the need
4. You have already obtained all distributable or non-taxable loans available under your 401k plan

If these conditions are met, the funds can be withdrawn and used for one of the following five purposes:

1. A primary home purchasee , , H board and fees for the next twelve months for you, your spouse, your dependents or children (even if they are no longer dependent upon you)
2. To prevent eviction from your home or foreclosure on your primary residence
3. Severe financial hardship
4. Tax-deductible medical expenses that are not reimbursed for you, your spouse or your dependents

All 401k hardship withdrawals are subject to taxes and the ten-percent penalty. This means that a $10,000 withdrawal can result in not only significantly less cash in your pocket (possibly as little as $6,500 or $7,500), but causes you to forgo forever the tax-deferred growth that could have been generated by those assets. 401k hardship withdrawal proceeds cannot be returned to the account once the disbursement has been made.

In most cases, an employee can borrow up to fifty-percent of their vested account balance up to a maximum of $50,000. If the employee has taken out a 401k loan in the previous twelve months, they will only be able to borrow fifty-percent of their vested account balance up to $50,000, less the outstanding balance on the previous loan. The 401k loan must be paid back over the subsequent five years with the exception of home purchases, which are eligible for a longer time horizon.

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401k Solutions, Enrollment and Maintenance for your business.

The 401k plan can be tailored to your business-

• Fund choice
• HR integration
• Reporting
• Processing Support
• Communication
• TEAM support

Enrollment is not a one size fits all solution.  A successful 401k solution has an enrollment process that meets the diverse needs of the business-

• Enrollment, employee reporting, and fund allocation can be Employee driven with Online Enrollment.
• Enrollment with a Call Center including Shadowing the enrollment process online.  Aide and online explanation of the enrollment process can be facilitated by the Call Center.  
• Facility visit enrollments can be planned and deployed too with a SINGLE or a Team enrollment options from one location to 100.
• PAPER enrollment is also an option as needed.

Maintenance is also a major requirement of a strong 401k solution-

• HR and Accounting communication
• HR and Accounting support and integration solutions
• Reporting
• Dedicated 401k call center to remove the load on local HR.
• Quarter/Semi-yearly/Yearly Senior Management reviews
• IRS/State compliance

How does your 401k solution provider add up?  Georgia 401k can provide solutions for the SOLO 401k, Small Business 401k, Safe Harbor 401k, and the large corporate 401k plans with 1000’s of employees.

Our team is NOT a single agent… We represent a conglomeration of 401k providers and not a single firm.

Contact us and be assured that we will not add you to a spam list.  A sales representative will contact you.  So… Consider contacting us now.  We look forward to having the opportunity to earn you business.

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401k services do come in all sizes.  Choosing the right 401k to meet your business is key to the proper 401k business and employee benefit.

Terms like:

• 401k – can be used to describe all of the 401k opportunities.  From Multi-national to the one man business.  401k is the most broad term.
• Small Business 401k – This is traditionally a 401k solution tailored to the business of 10-200 employees.   Required employee matching is NOT necessarily an requirement in when discussing the “Small Business 401k”.
• Solo 401k- This is a DEAL for the small business owner with the need to fund a plan.  Since January 10th, 2008, the rules have changed and the Solo 401k plan can position more funds to be set aside than ever before.

There may be other names or other tweaks of the names above, but these are a great start to the overall plans readily available at Georgia 401k.    Start your investigation today by providing a SMALL amount of information that will initiate-  ONLY a call from our office.  NO Spam, NO hundreds of calls from brokers nationwide… Just a single call from our preferred Georgia 401k specialist.

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The employee/employer cycle has its ups and downs. Today, employers are down-sizing, becoming leaner, and working any angle to be more profitable in a down economy.  The employee is working to keep their job knowing that the glut of replacement workers is growing.  At the same time, the level of “profit producing work” in many industries is decreasing.

Providing additional benefits to the employee are sometimes questioned when economic conditions are challenging.    A Georgia 401k added to a list of benefits for the Georgia based business can be economically beneficial and add REAL DOLLARS to the business’ bottom-line:

1. The 401k employee “benefit” can save the employer REAL DOLLARS.  The expectation to “match funds” is a preceived requirement to the 401k “benefit”.  Saving prior to the tax implications is the REAL benefit for the Employer and Employee.  Example: A dollar contributed by the employee saves the employee taxable income.  The Employer saves REAL DOLLARS by side-stepping FICA and other employee applicable wage expenses.
2. A leaner work force can increase employee responsibility while adding employer vulnerability. The decrease in work force often results in the staff/team taking on more responsibility.   The added responsibility can position the employer with additional vulnerability if a key person were to resign.   Adding “employer low-cost benefits” or “employer no-cost benefits” at the same time of adding employee responsibility augments the employee’s emotional security during economically trying times.

There are other issues like the “cost to replace” an employee but future posts will provide more information.

Start your investigation of implementing a 401k program or other employee/employer funded programs by submitting the form below.   A Georgia 401k specialist will be in touch…

NOTE: We do not spam your information.  We work with a couple of 401k specailists that focus on the Georgia Business and 401k solutions.

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