Is there a law with the IRS that states I cannot withdraw from my 401K before the age of 59 1/2. ING is telling me that I cannot according to the IRS.
by 
Anonymous
ANSWERS: 3
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I think the rule is that you have to pay a lot more tax on the money when you withdraw it early. You're not taxed on it until you withdraw it.
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You can take a 401(k) hardship distribution if you have what the IRS calls “an immediate and heavy financial need.” Depending on your plan’s rules, the following needs could qualify: Payment needed to prevent eviction from, or foreclosure on, your principal residence. Certain medical expenses Burial or funeral expenses Cost of repairing damage to your principal residence Cost of purchasing your principal residence Tuition and related educational fees and expenses Also, if you are no longer working for the company that has established your 401K, you can cash it out as well. You will be taxed and penalized quite heavily on it though. There is another option of borrowing against it, but it would be up to the company that you are working for.
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ING is not telling you the truth or you are not hearing them correctly. YOU can withdraw the money, but there will be penalty and taxes to pay. After age 59 1/2, the penalty goes away.
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