The Bottom Line
“I don’t think [withdrawal problems are] all that prevalent,” says MicKey. “Most companies that have these types of investments are not the average 401(k) plans.”
If your investments are affected by a similar freeze or limit on withdrawals, you may have to wait until the end of the year or later to receive distributions from your 401(k).
“Unless the current economic environment improves more rapidly than expected, we do not anticipate that we will be able to make any queue distributions until late 2009 or beyond,” says Hale of Principal Financial.
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Of course, withdrawing from or cashing out your 401(k) should be your absolute last resort, after using your emergency savings, and maybe even borrowing money from family or friends.
And remember, if you do borrow money from your 401(k), you’ll miss out on interest. If you’re taking out a substantial amount, that could mean a significant dent in your retirement funds, plus possible additional penalties and taxes.
Related Stories:
7 Ways to Sock Away Emergency Cash
How to Roll Over Your 401(k) Into an IRA
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