Hurricane update: IRS facilitates withdrawals from 401(k)


The Internal Revenue Service (IRS) announced that participants of 401(k) plans (and other types of company-sponsored retirement plans) affected by Hurricane Harvey, are automatically approved to obtain a hardship withdrawal and/or participant loan from their 401(k) plan. This means that business owners and their employees can access their retirement monies as financial assistance for recovery from this disaster and other basic needs.

Rules apply

Strict administrative and procedural rules often apply to hardship and loan programs in a retirement plan; the IRS’ announcement effectively suspends these restrictions for victims of Hurricane Harvey and allows retirement plan participants to more quickly and easily gain access to their 401(k) or other retirement monies.

Parameters for distribution

401(k)s and similar employer-sponsored retirement plans can make loans and hardship distributions to victims (and family members). This broad-based relief means that a retirement plan can allow a victim of Hurricane Harvey to take a hardship distribution or borrow up to the specified statutory limits from the victim’s retirement plan/account. It also means that a person who lives outside the disaster area can take out a retirement plan loan or hardship distribution and use it to assist a son, daughter, parent, grandparent or other dependent who lived or worked in the disaster area. Leading Retirement Solutions is helping 401(k) participants and business owners, affected by Harvey, get access to their retirement monies for disaster recovery and basic needs.

Update: Irma

In the wake of Hurricane Irma, the IRS has issued a number of benefits, similar to those extended after Hurricane Harvey, to business owners and their employees participating in a 401(k), 403(b), Defined Benefit or other type of company sponsored retirement plan.

Additional resources

Here is additional information from Leading Retirement Solutions.

Information on the role of a public adjuster in the wake of a disaster

The United States Department of Labor offers a compliance guide  as well as an FAQ.

Here are more disaster relief resources for Vistage members.

Read more about disaster relief resources through the SBA.

Print Friendly, PDF & Email

Leave a Reply

Your email address will not be published. Required fields are marked *

Predefined Skins

Primary Color

Background Color

Example Patterns

demo demo demo demo demo demo demo demo demo demo

Privacy Policy Settings

  • Required Cookies
  • Performance Cookies
  • Functional Cookies
  • Advertising Cookies
These cookies are essential in order to enable you to move around the Sites and use its features, such as accessing secure areas of the Sites and using Vistage’s Services. Since these cookies are essential to operate Vistage’s Sites and Services, there is no option to opt out of these cookies.
These cookies collect information about how visitors our Sites, for instance which pages visitors go to most often. These cookies don’t collect information that identifies a visitor. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.

Cookies used

Visual Web Optimizer
These cookies remember information you have entered or choices you make (e.g. as your username, language, or your region), and provide enhanced, more personal features. They may also be used to provide services you have asked for such as watching a video or commenting on a blog. They may be set by us or by third party providers whose services we have added to our pages. If you do not allow these cookies then some or all of these services may not function properly.

Cookies used

Google Analytics
GTM
Gravity Forms
These cookies are used to make advertising more relevant to you and your interests. The cookies are usually placed by third party advertising networks. They remember the websites you visit and that information is shared with other parties such as advertisers. If you do not allow these cookies, you will experience less targeted advertising.