Saving for retirement is easier when your contributions automatically come out of each paycheck.
You may be eligible to borrow up to one-half of your vested 401(k) account (to a maximum of $50,000) if you need the money.
You may be able to make a hardship withdrawal if you have an immediate and heavy financial need. But this should be a last resort–hardship distributions are taxable events (except for Roth qualified distributions), and you may be suspended from plan participation for six months or more.
If you receive a distribution from your 401(k) plan before you turn 59½, (55 in certain cases), the taxable portion may be subject to a 10% early distribution penalty unless an exception applies.
Depending on your income, you may be eligible for an income tax credit of up to $1,000 for amounts contributed to the 401(k) plan.
Your assets are generally fully protected from creditors in the event of your, or your employer’s, bankruptcy.