Whenever confronted with a unexpected money crunch, it can be tempting to touch your 401(k)

Whenever confronted with a unexpected money crunch, it can be tempting to touch your 401(k)

You will miss out the compounded earnings you would otherwise get, you’ll probably get stuck with very early withdrawal charges, and you should definitely need to pay tax in the amount withdrawn to the government.

In the event that you positively must draw from your own 401(k) before 59-1/2, and emergencies do crop up, there are many methods it could be done.

Hardship withdrawals

You’re permitted to make withdrawals, as an example, for certain qualified hardships — though you will probably nevertheless face a 10% very very early withdrawal penalty in the event that you’re under 59-1/2, plus owe ordinary income taxes. […]