When Making an Early Withdrawal From a 401(k) Makes Sense

Imagine you're struggling to pay bills. Out of the corner of your eye, you see your 401(k) balance and feel the temptation to use some of that money. Ninety-nine times out of 100, I'd be the first person urging you not to dip into those retirement savings. Withdrawing funds from a 401(k) plan before the age of 59 1/2 means owing taxes on the funds, in addition to a 10% penalty.But emergencies do happen, and you may feel you have no other choice. In these situations, I'd still argue the only time making an early withdrawal from your 401(k) could make sense is if you can take the funds without paying the penalty. Thankfully, the IRS spells out specific situations in which you're able to make such penalty-free withdrawals.Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool