Thousands Now Survive Financial Hardship Who Never Thought They Could….with A Solo 401k !
Posted by Lawrence_groves in Financial PlanningFinancial Emergency! It is unpredictable yet it happens to all of us. Whether it’s college tuition for your daughter, unexpected medical bills from an accident in the yard, covering the higher than expected closing costs on your new home or avoiding foreclosure or eviction because spending got out of hand; you’re going to need money fast.
As one of the requirements for the tax exempt status of your Solo 401k, distributions of funds from your Solo 401k are limited to termination of employment, retirement, disability, death, plan termination or inservice distributions after age 59.5. Severe options for those needing a temporary cash infusion.
Your Solo 401k to the Rescue.
To cover those immediate situations, the IRS allows Solo 401k’s to provide two sources of funds: Number one is a loan of up to the lesser of $50,000 or one-half of your vested account balance. Number two is the hardship disbursement of salary deferral contributions for financial hardships.
Loans from your retirement account must meet the provisions of section 72(p) which requires that the:
