Historically, certain non-elective and matching contributions made by the employer, earnings on those contributions along with those on employee deferrals in 403(b) plans were not available for hardship withdrawals. Additionally, if a plan allowed for loans, a participant was required to take a loan before receiving a hardship withdrawal. However, these same restrictions did not apply to 401(k) plans.

SECURE 2.0 removed that disparity, putting 403(b) plans on par with 401(k)s for withdrawals in plan years beginning in 2024.

Let Pinnacle Plan Design Help

Consultants at Pinnacle Plan Design are actively monitoring new guidance concerning SECURE 2.0. This represents our understanding of the laws at this time. Additional guidance will provide additional clarity. If you have any questions about the hardship rules in your retirement plan, don’t hesitate to contact us at (520) 618-1305.

The content of this page is for general information only. While it is believed to be accurate and reliable as of the posting date, it may be subject to change as additional guidance becomes available. It is not intended to provide investment, tax, or legal advice. For advice regarding your specific circumstances, please seek services of an appropriate independent legal, tax, or investment professional.