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I contributed around 10k to my Roth 401k in 2023, but I need the money due to my personal situation quite immediately (2-4 weeks). Is there any mechanism of undoing my contribution and getting the money instead?

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  • Is it traditional or Roth?
    – littleadv
    Jan 25 at 4:26
  • It is Roth IRA. Updated the question and tag accordingly.
    – haku
    Jan 25 at 6:13
  • Roth IRA and Roth 401k are not the same thing. 401k plans are more restrictive than your personal IRA.
    – littleadv
    Jan 25 at 6:25
  • I meant to say roth 401k, not roth ira in my earlier comment.
    – haku
    Jan 25 at 13:23

2 Answers 2

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Besides looking at the ability to withdraw your contributions to the Roth 401(k) there are other possibilities.

You may be able to get a loan from your 401(k).

You should also look at the [IRS rules for a hardship distribution] to see if you qualify:

Although not required, a retirement plan may allow participants to receive hardship distributions. A distribution from a participant’s elective deferral account can only be made if the distribution is both:

  • Due to an immediate and heavy financial need.
  • Limited to the amount necessary to satisfy that financial need.

The document goes on to describe immediate and heavy financial need, including the fact that it isn't to purchase a consumer product.

A distribution is automatically considered to be necessary to satisfy an immediate and heavy financial need if all of the following requirements are met:

  • The distribution isn't greater than the amount of the immediate and heavy financial need, including the amounts necessary to pay any taxes resulting from the distribution.
  • The employee has obtained all other currently available distributions (including distribution of ESOP dividends under section 404(k), but not hardship distributions) and nontaxable (at the time of the loan) plan loans, including all other plans maintained by the employer.
  • The employee isn't allowed to make elective deferrals to the plan for at least six months after the hardship distribution.

It might qualify under the safe harbor provisions described in the same IRS document.

There can be tax issues:

Tax treatment of hardship distributions

Hardship distributions are subject to income taxes (unless they consist of Roth contributions). They may also be subject to a 10% additional tax on early distributions. Employees who take a hardship distribution can't:

  • repay it to the plan, or
  • roll it over to another plan or an IRA.

Start with your company documents that describe the feature of your plan.

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You can withdraw Roth contributions any time from the IRS perspective, but you need to check with your plan if they allow withdrawals while employed ("in-service"), not every plan allows.

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