[stormy602]

I have been unemployed from my job of 25 years for the past three years. I am unable to work due to physical and mental disabilities. I am 46 years old and am about to make my second withdraw from my 401k. I have read that if disabled, the 10% penalty can be waived. I am awaiting a court date for my Social Security permanent disability. If I receive it, can I recoup my 10% penalties, as I was disabled at the time of the withdraw, but it was not finalized at the time. Thank you.

[MukatA]

The exception to Early Withdrawal penalty includes
*if you are totally and permanently disabled,
*You have deductible medical expenses (medical expenses that exceed 7.5% of your adjusted gross income).

Also you can withdraw due to Hardship. Check with your plan administrator.
Many 401(k) plans allow employees to make a hardship withdrawal because of immediate and heavy financial needs. Generally, hardship distributions from a 401(k) plan are limited to the amount of the employee's elective deferrals.
Read Your U.S. Tax Return: Elective Deferrals 401(k) Plans