By Morgan Quinn
Taking an early withdrawal from your 401(k) is not only costly in the short term, it can also jeopardize your long-term retirement goals.
If you withdraw retirement accounts before the penalty-free 401(k) withdrawal age of 59.5, you’ll be forfeiting the benefits of tax-deferred earnings and compounding interest, which diminishes the savings power of 401(k) accounts. These plans are specifically designed for long-term investing, making the years work in the contributor’s favor.
Because of the severe financial penalties, withdrawing money early from retirement accounts should be done only in an extreme emergency, ideally after any emergency funds and investments have been depleted. If you are in a financial pinch and considering taking money out of your 401(k) or any other retirement savings account, here are four times it’s OK to dip into your retirement fund early.
“Read the Full Article at www.detroitnews.com >>>>”