Generally, you cannot access funds held in your employer sponsored retirement account while you still have employment. However, when faced with a serious financial situation, the Internal Revenue Service's tax code has a provision that allows for hardship withdrawals. Your employer does not have to allow such withdrawals, as the IRS does not compel companies to make hardship withdrawals available to employees. If your employer does allow for hardship withdrawals, you must write a letter that details the reason that you need the money. You should also provide your employer with some documentary evidence to support your case.
Step 1
Review the IRS guidelines for hardship withdrawals to determine whether you qualify to make such a withdrawal. You can make a withdrawal to cover medical expenses for you or a dependent, to buy a primary residence, to make a payment to prevent eviction or foreclosure, to cover educational expenses, funeral expenses or to complete necessary repairs on your home. Review you employer's plan to ensure that the plan allows you to make withdrawals and find out from your supervisor the person to whom you should address the letter.
Step 2
Type your name, address, phone number and email address at the top of the page. Include your employer's name and address as well as the date just above the main body of the letter. Use a formal salutation to start the letter such as "To whom it may concern," if you do not have to address it to a specific individual.
Step 3
Explain that you need to make a hardship withdrawal in the first sentence of the letter and state the reason for the withdrawal. Include the exact dollar amount that you need in order to resolve your financial hardship but remember that you can only access money that you deposited into the account and not your employer's contributions. Attach relevant supporting documentation to the letter such as an eviction notice or medical bill, and detail the supporting documentation that you have listed in the body of the letter.
Step 4
Sign the letter. Print at least two copies of the letter so that you can give one to your employer and keep one for your own records. Your employer should contact the 401k custodian directly to authorize the withdrawal but you may also have to give a copy of the letter to the 401k custodian.