Legal Blog

Dipping into Retirement Just Became Easier – 401k Access Rules Changing

For better or worse, hard times can hit any individual or family for one reason or another. When money becomes tight – the question remains: how does one stay afloat? The Internal Revenue Service (IRS) recently announced new rules surrounding accessing retirement funds early – which impact both employees and employers who may administer retirement plans.

Under the new rule changes, the IRS further clarified the “hardship exemption” while also modifying the terms by which employers/employees should allow withdrawal. The rule changes do not give employees “carte blanche” to withdraw without penalty – but instead streamline withdrawal. The rule changes include (but are not limited to) these important alterations:

  • Employees no longer need to wait six months before they can contribute again. Previously, a six-month moratorium was applied – now, employers must allow contribution to initiate again immediately.
  • Earnings on 401(k) are now also accessible when a hardship withdrawal is taken. Previously, only contributions could be withdrawn.
  • Proving hardship is now less difficult. The rules change states that plan administrators can rely on the employee’s certification regarding their hardship – until contradictory information becomes available.

These changes become effective as of January 1, 2020. With year-end approaching, I recommend that employers review their current policies and update as necessary – before the hectic holiday season begins. Feel free to reach out to me regarding your employee benefit plans.

If you have any questions about this or any other Labor and Employment topics, please contact me at or 703-745-1849



Theodora Stringham assists individuals, businesses, and organizations with growing successfully while minimizing liability. Focusing on real estate and personnel needs, Ms. Stringham executes sustainable plans for real estate development and employee matters. She provides comprehensive representation for everyday growth issues, including, but not limited to, re-zonings, site plan approvals, eminent domain/valuation concerns, employment discrimination, and disciplinary issues. Ms. Stringham’s scope of representation ranges from identifying potential liability and providing counseling/trainings, all the way through representation at trial.






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