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adrienne-latimer
March 4, 2025
Question

I took out 401K due to a lay off. Does this qualify for emergency expenses?

  • March 4, 2025
  • 1 reply
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    1 reply

    M
    MindyB
    March 4, 2025

    Yes. The IRS defines “emergency personal expense" as an unforeseeable or immediate financial need relating to necessary personal or family emergency expenses. (Section 115 of the Secure 2.0 Act)

     

    An emergency will allow you to make a withdrawal, still subject to tax, but without the 10% early withdrawal penalty. ‌You can take one financial withdrawal emergency per year, not to exceed $1,000.

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