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Emergency withdrawal from 457 plan

Guest JC

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I recently lost a parttime job which I relied on to supplement my income. This was unexpected and I have found myself unable to pay my bills. I applied for an emergency withdrawal from my 457 plan. My employer wouldnt make a decision on whether or not to approve the withdrawal. They sent the application to the plan administrator who stated that they didnt believe it was an emergency and that if my employer authorized the withdrawal that they could not support them if they were audited. My employer is afraid of repercussions if they authorize this withdrawal. Any ideas on what I might do next.

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Guest CVCalhoun

You have a tough case here--partly because the legal standards are tough, partly because the ramifications of allowing an unauthorized withdrawal are so negative for the employer that employers aren't inclined to take chances in doubtful cases.

One thing which may help: try to show as clearly as possible that the bills you can't pay are for necessities. For example, if you are unable to pay a credit card bill, that may not impress the plan administrator if the plan administrator has no way of knowing whether the bills arose from lavish vacation trips, etc., that you took after knowing about the loss of your part-time job. But if you can show that even with your paycheck plus available savings, you are unable to meet your mortgage, rent, food, etc. needs, the plan administrator is likely to be more cooperative.

Good luck!

[Note: This message was edited by CVCalhoun]

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