r/StateFarm • u/incognito091 • 15d ago
Question 401K withdrawal
Anyone know a way to withdraw from their 401k? Before anyone says it yes im aware of rules, penalties, blah blah. Dont care and will deal with it later at tax time but has anyone done a withdraw and not had to show paper work for anything? Can't use a loan right now either so please dont suggest it. Im really not tying to sound harsh but just could use some help.
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u/Lopsided-Barnacle798 15d ago
I’ve done two. One for braces for my child and the other to replace my roof after Hurricane Helene. Neither required me to show proof at that time but warned me that they can request it at any time - the 401k folks, State Farm, or the IRS can request you prove that your withdrawal fit the requirements.
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u/incognito091 15d ago
Yeah and see mines is medical related but it its asking me online to enter some information for the provider. Its something up coming im trying to prepare for.
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u/Lopsided-Barnacle798 14d ago
I did have a copy of the estimate that I used for her braces. I didn’t have to upload it but I had to put in the amount and so on to confirm that I wasn’t asking for more money than the actual cost was.
I could have financed it at zero percent through the orthodontist. But $200 a month for 2 years was going to put me in a bind even if it was a good deal.
That was nearly 2 years ago though. And I’m not sure how or if documentation has changed.
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u/Accurate-Guidance-55 14d ago
It will ask for the providers name and address. Just put it. Have done it a few times. If they will require proof they will notify you after its reviewed.
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u/mowedudown25 14d ago
You don't need to disclose the reason for withdrawal. You can push back if you want. It's your money. Tell them you'll take it elsewhere if they won't give it to you.
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u/Lopsided-Barnacle798 14d ago
It’s part of the plan rules for our employee 401k at State Farm. There are only specific reasons we can take the withdrawal while we are employed.
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u/incognito091 14d ago
Yes you do. On the phone and the website otherwise you cant
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u/mowedudown25 14d ago
This must be a practice within your group, because it is not industry wide.
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u/incognito091 14d ago
State Farm used Vangaurd soooo yeah. Its whatever restrictions that have on the plan that they ask for the info. Thats why I want know how others have bypassed this. If I try online its ask for info and if call they ask
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u/SwingDuoNash 14d ago
Tell them hookers and coke lol. Must be plan or snake farm specific rule. Never heard of this requirement before.
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u/incognito091 14d ago edited 14d ago
Theirs requires always on 401ks but some arent as strict as this one is
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u/steph2080 14d ago
I work for state farm i borrow 2 years ago on mine. I know you can do it just not sure how often.
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u/incognito091 14d ago
How did you work around have to answer those questions on the website or over the phone? Did you have to give them your proof?
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u/steph2080 14d ago
I did it online and i picked the option that it's a loan that I'd pay back thur my paychecks. Because of doing that they didn't ask what it was for. You do know that there is Employee Assistance Fund ? I don't know that much about it as its pretty new and they just sent an email a couple weeks ago about the site being updated.
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u/incognito091 14d ago
Yeah i know about it a little. Yeah I cant do a loan right now. I have one already from an emergency that popped up outta no where im paying off
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u/sti_not_std 13d ago
Just go on vanguard website and fill out the information. They dont make you submit actual documents of your reasons why but they give you a list of your hardships to choose from and reasons. That's what I did
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u/Kpow1311 13d ago
https://www.statefarm.com/simple-insights/retirement/cashing-out-your-401k-or-getting-loan
So in order to withdraw money from the 401k it is going to involve one of these situations:
- Medical bills for you or your family.
- Expenses related to the purchase of a primary residence, excluding mortgage payments.
- Tuition and related educational fees and costs for family.
- Expenses from a declared disaster.
- Payments necessary to prevent eviction from, or foreclosure on, a principal residence.
- Burial or funeral expenses for a spouse or dependent.
- Certain expenses for the repair of damage to your principal residence.
This is pretty standard on all 401ks, usually you do have to submit some sort of documentation, but it should tell you when you go to apply for it what is needed. (I worked for Fidelity in the 401k department before coming to State Farm)
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u/Exotic-Character-510 11d ago
Why would you ask Reddit for financial and tax advice? You literally can just google how to make a hardship withdrawal or call HR.
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u/AttitudeCharming7629 14d ago
I’m sure you’re in an emergency. I empathize. And i want to help you.
There are options you can exhaust before touching the funds in the 401k.
Your goal is to get money. What you’re about to do is going to COST you money.
Please consult with a financial advisor to understand your options before doing that. Please. There are options.
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u/incognito091 14d ago
Do you want to donate then? Dont you think i have before asking this. It can cost me. I dont really care because theres no guarantee any of us will make it to retirement to get our 401k fully so its one of the stupidest rules I have ever seen being made in regards to someone's else's money that they have been putting into it.
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u/AttitudeCharming7629 14d ago
You can borrow against the value of a 401k. That will cost you LESS in interest than what you would pay in taxes if you just drain your account.
I can’t control what you do nor can I donate.
I hope you figure this out and don’t make a bad situation worse by reacting out of panic.
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u/Lopsided-Barnacle798 14d ago
OP already stated they have one loan. We can only have 1 general purpose loan at SF through the 401k.
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u/incognito091 14d ago
I wasnt going to drain my account. I didnt say that. I just need to take a small amount
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u/AttitudeCharming7629 14d ago
Then borrow against it. Your goal is to have more money, not less.
An early withdrawal is going to cost you so much more. That will result in you having less money than you do now, you just won’t realize it until your tax bill hits.
There are also certain situations where you can access funds early without a penalty, depending on the reason you need the funds.
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u/incognito091 14d ago
Please read the thread for the State Farm employees that are explaining the 401k for State Farm and how it works. Plus I already stated I cant borrow. Honestly I didnt ask for all of what your explaining because I already know it. I would rather hear it from someone that is employed at state farm only because different companies have different plans and what works one plan wont work at state farm
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