Will credit card debt qualify for a hardship withdrawal?
Summary:
- The user, Gullyeon, is facing the problem of needing to withdraw from their retirement account to pay off $8,000 in credit card debt, but is unsure if this qualifies as an acceptable reason for a hardship withdrawal.
- Fidelity’s representative outlines the IRS definition of hardship withdrawals, which does not include credit card debt as a valid reason.
- Gullyeon is advised to check their plan’s Summary Plan Description (SPD) for specific options regarding withdrawals.
- For further assistance, Gullyeon is encouraged to contact Fidelity’s workplace associates during business hours for a more tailored review of their situation.
Here’s the full thread
I have 8k CC debt & an 18k retirement account with fidelity. There is an option for a hardship withdrawal but it doesn’t mention credit card debt. Is this an acceptable withdrawal reason and if not is there any other way to leverage the account to withdrawal?
Hi there, @Gullyeon. Thanks for stopping in.
The IRS defines hardships distributions as the following:
– Medical care expenses for the employee, the employee’s spouse, dependents or beneficiary.
– Costs directly related to the purchase of an employee’s principal residence (excluding mortgage payments).
– Tuition, related educational fees and room and board expenses for the next 12 months of postsecondary education for the employee or the employee’s spouse, children, dependents or beneficiary.
– Payments necessary to prevent the eviction of the employee from the employee’s principal residence or foreclosure on the mortgage on that residence.
– Funeral expenses for the employee, the employee’s spouse, children, dependents, or beneficiary.
– Certain expenses to repair damage to the employee’s principal residence.
You can check your plan’s Summary Plan Description (SPD) to see what available choices you may have. Please keep in mind that every 401(k) plan has its own rules set by the employer.
If you need help, please contact our workplace associates to review. They are available Monday through Friday from 8:30 a.m. to midnight ET.
Contact us: https://www.fidelity.com/customer-service/contact-us 🟢