Americans Tap 401(k) Plans After Hurricanes and Natural Disasters

Tuesday, October 04, 2022

News & Press

Florida residents who suffered financial losses from Hurricane Ian might be able to tap their retirement accounts to cover emergency expenses, a last resort more victims of natural disasters are using.

Though 401(k) plans are set up to keep Americans’ nest eggs out of reach until retirement age, the Internal Revenue Service allows savers to pull money out for certain economic hardships, including buying a first home, preventing foreclosure and covering high medical bills. Since the IRS added natural disasters to the list of sanctioned reasons for hardship withdrawals in 2020, thousands of workers have tapped their retirement savings for that purpose.