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sdfewl asks,

My question (which I admit is marginally relevant to RE, but this board is the smartest place I know of for 401K questions) is: Can she withdraw the $5000 out of her 401K without paying the penalty. I'm also checking into whether she can get current disability and even better past disability. Man it has been awful to watch someone's financial health destroyed. She lives way below her former means (and did at that time). She's lived over one year with sporadic income at best.

According to http://www.pueblo.gsa.gov/cic_text/money/401k/401k.txt, the answer depends on her particular 401(k) plan.

In most cases, she can withdraw uninsured medical expenses that exceed 7.5% of her AGI, but she'll have to pay taxes on it as well as the 10% penalty.

However, if she is declared disabled as defined by the IRS and her 401(k) plan, there is no 7.5% limit and the 10% penalty is waived.
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