The employees also have access to the 401k hardship withdrawals which can be made in case the employer does not offer its employees the 401k loans. The withdrawal can be made where a severe financial need exists or the need cannot be satisfied through other monetary fund’s that might be currently unavailable at the time.
Such hardship withdrawals pertaining to 401k can be made to purchase a primary house, to finance higher education or tuition for oneself or their children, to prevent home disclosure or evict notice or in cases where the medical expenses that tax deductible are not reimbursed for the employees or their dependents (Kennon). Similarly the on financial hardship withdrawals are also present in the 401k plans which have the 10n percent penalty fee waived if the employee selects this option. These withdrawals can be made in case of permanent disability, where the medical debts of the individual exceed by 7.5 percent of gross income of the individual, where the employee is laid off at or after the age of 55 or when a divorce settlement has to be made by the individual.