Can I cash out my 401(b)?

I had my 401(b) through Merrill Lynch and the college I work for changed companies. Now I have a new 401(b) that I am contributing to. In the meantime, I have about $1500 that has been sitting in my Merrill Lynch account for about a year. I called them and they said that I can close it and cash it out. We finished all the paperwork, but the administrator in my HR department says that she can not approve it. I have just bought a house and really need the money for minor repairs and the holidays. How can I get this money?|||HR will not allow you to take the money out unless you can prove extreme hardship.


You will have to show documentation to HR that you are in serious financial stress.


/|||Oh - Please don't do this. If you cash it out, you will lose half of it to taxes and penalties. Instead, roll it over to your new plan. If you need some spare cash, then just change your tax withholding form at the payroll department (since you bought a house, you will have a big tax deduction next year and can have more takehome pay now to reflect that change). If you increase your withholding to Single 9, you can get about $900 more a month in take home pay, depending on your earnings.





Just remember to change it back to your normal W-4 calculation after January.





Do a frugal holiday instead - talk it over with the other adults on your shopping list and see if they will agree to maybe do a party/dinner together to celebrate or a low-cost gift swap. No one really needs a bunch of new sweaters, trinkets and junk, and I bet your friends/family will be relieved to not have to shop as much as well.|||If the funds are in a account for the current job then yes they would have approve such a disbursement. If it's from a job you no longer work at then you shouldn't even have to involve your current job. Did you already a transfer to the new account? Then it would be locked up until you are old and grey.


It sounds like all they did was change to company managing the accounts. So, the money is connected to the job not the company. As long you have the job you can't touch the funds. At some point the new company will probably incorporate the old accounts into the new ones.