Don’t Even Think About It – Touching Your 401(k) That Is!

Look, if you’re absolutely stuck right now, then you’ve got to do what’s necessary but, in my opinion, you should avoid 401(k) hardship withdrawals at all costs … and think long and hard before you consider borrowing against your future retirement. With so many people nearing retirement already grossly underfunded [such actions are] going to prove catastrophic down the line. Words: 1043

Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com, provides below further reformatted and edited [..] excerpts from Nilus Mattive’s (http://www.moneyandmarkets.com) original article* for the sake of clarity and brevity to ensure a fast and easy read. (Please note that this paragraph must be included in any article reposting to avoid copyright infringement.) Mattive goes on to say:

Fidelity reports that a record number of Americans are making hardship withdrawals from their 401(k) retirement plans (and, worse yet, those borrowing from their plans is also at a 10-year high!). [In addition to mortgaging their future retirement well-being such] withdrawals get assessed an additional 10 percent penalty besides the regular taxes [they must pay on the withdrawal amount as income in the year of withdrawal meaning that a large portion] of their nest egg money gets vaporized before it even goes toward their immediate needs!

PROS and CONS of Borrowing Against Your 401(k)
Fidelity said 45 percent of the people who took a hardship loan last year took ANOTHER ONE this year. On the surface it’s better to take a loan than an outright withdrawal because taxes and penalties aren’t assessed [the one and only PRO) but here are a couple of CONS: (Go here to continue reading this article. No registration is required. It is a direct link.)

 *http://www.moneyandmarkets.com/the-perils-of-tapping-a-401k-39976 (Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil.)

– The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
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