Early 401K Withdrawals: A Costly Mistake
Update: 2025-11-29
Description
Taking early withdrawals from your 401K can have severe long-term consequences. It not only reduces your investment base but also costs you decades of compounding returns. The rising cost of living often leads employees to take loans or withdrawals, which can erode savings by tens of thousands of dollars over time due to taxes, penalties, and lost growth. A 401K withdrawal is taxed as regular income and usually comes with a ten percent early withdrawal penalty. A loan, while avoiding immediate taxes and penalties, can still lead to a taxable withdrawal with the penalty if not repaid within five years or if you leave your job. Consider alternatives like an emergency fund or a personal loan before tapping into your retirement savings.
The Daily News Now! — Every city. Every story. AI-powered.
Hosted on Acast. See acast.com/privacy for more information.
Comments
In Channel
Download from Google Play
Download from App Store
United States00:00
00:00
1.0x
