The Rules: Understanding Your 401(k) · To pay education expenses (for yourself, your spouse, or the kids) · To prevent eviction from your home 22 Our Advice If you run into a cash-flow problem and you can't repay your loan, ask your manager (the plan administrator) if you can take advantage of the 90-day IRS grace period. But don't be surprised if he says no--if admin- istrators do it for you, they must do it for everyone else. · To buy a principal residence · To pay medical expenses Needless to say, 401(k) plans that offer only hardship loans have very few loans outstanding. Withdrawals Just in case you need money for an emergency, the IRS says that you can tap into your retirement funds, but you will pay a penalty. Your employer may allow four types of withdrawals: