This week we chose to answer the question “Can I use a 401K Retirement Plan to Cover Medical Expenses ?”
Intended only as a strict last resort, it can be possible to withdraw money from a 401(k) retirement plan in order to pay off medical expenses that aren't covered by the individuals health insurance. Such a withdrawal is known as a ‘Hardship Withdrawal‘ and it's worth noting that not all plans will offer this course of action.
Those that do have strict guidelines that must be adhered to, as well as some fairly harsh penalties for taking money out before the official retirement age. This last resort can also be used to cover medical expenses of the spouse or dependents, so long as the required documentation such as medical bills and a statement indicating any expenses not covered by the individual's health insurance.