Hi everyone and welcome back to Money Girls Quick and Dirty Tips for a richer life.

I'm Laura Adams.

Many people are tempted to take money out of their work retirement plan when they hit a financial rough patch.

I get plenty of emails from listeners asking my opinion about

whether I think it's okay. Before you pull the trigger and take an early

withdrawal from a 401k or a 403b, it's really important to fully understand the rules and penalties.

I'm going to tell you when you can take a withdrawal and try to persuade you to never take money out of a retirement plan if you can help it.

First, let me back up and briefly explain 401k and 403b retirement plans.

They're offered by employers, so workers can easily save money for retirement.

One of the best features of these plans is that many employers match all or a portion of an employee's contributions by depositing additional funds into their account.

Most corporations can set up a 401k plan, but a 403b is available for certain organizations such as nonprofits, public schools, hospitals, and churches only.

There are also 457 plans for state and local government workers and a thrift savings plan for federal

employees, but they operate under slightly different rules.

Many people mistakenly believe that they can take money out of a 401k or a 403b at any time and for any reason.

If you are counting on using 401k funds to pay for your next vacation or to buy a car, I hate to

disappoint you, but it isn't allowed.

You can only take money out of one of these plans when you reach the age of 59 and a half,

qualify for a hardship, leave the job, become disabled or die.

Workplace retirement plans have very strict rules about when you can take money out,

and some plans don't allow for any kind of hardship withdrawal.

The IRS specifies that taking a hardship distribution can only be allowed in the following situations.

To prevent eviction from or a foreclosure on your primary residence,

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