Wrong. Companies are not required to follow the 6 hardship categories, and there are companies that extend the hardship to beyond the 6. Some even allow for almost any explanation of a hardship, at the company's discretion.
While it is USUALLY true that you do have to take any available loans before applying for a hardship withdrawal, that is not always the case.
By the way, the company is not even required to make loans available to you at all. Nor are they required to make hardship withdrawals available either. It's totally up to them.
They can also choose to make in-service withdrawals available to employees under 59 1/2. This is not as common and usually occurs with a long tenure, say over 10 or 20 years, or based on age, say over 50 or 55 years old. And again, not as common. Point still being though, that's the company's decision.
Also the money is not necessarily yours when they deposit it into your account. Most companies have vesting requirements of some kind, meaning they put the money in on your behalf, but it's not yours until you are fully vested. That is usually between 1 and 5 years. Of the money that is yours, you're right... maybe you don't want your money in there if you have serious objections about the plan's rules. But keep in mind, the 401k was designed to help prepare for retirement, not armageddon. Or even hardships for that matter.
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